Chinese e-commerce giant JD.com announced on Wednesday its plan to potentially repurchase up to $3 billion worth of shares through March 2027, following the release of its fourth-quarter financial results. The news propelled the company’s U.S.-listed stock to surge.
JD.com reported a fourth-quarter net revenue of 306.1 billion yuan ($42.5 billion), exceeding expectations and marking a 3.6% increase from the previous year. Net income attributable to shareholders for the October-December quarter also saw a notable rise, reaching 3.4 billion yuan, up over 13% compared to the same period in 2022.
The Nasdaq-listed shares of the Chinese retailer closed with a 16% gain at $24.91, although slightly lower than the intraday high of $25.67. Despite this surge, the stock has experienced a decline of more than 13% year to date.
JD.com faces intensified competition from rivals such as bargain retailer Pinduoduo and ByteDance’s Douyin social media platform, which has been disrupting the e-commerce sector with its live commerce feature. In response, JD.com has ramped up efforts to attract price-sensitive buyers by offering more discounts and expanding its range of budget-friendly products.
The company has also implemented customer-centric initiatives, including lowering the order value threshold for free shipping and introducing new services like “free doorstep pickup for return” and “cash back for delayed shipping.” These measures have resulted in accelerated user growth, particularly in rural areas of China, where JD.com aims to strengthen its presence and fend off competition.
CEO Sandy Xu emphasized the importance of these efforts in driving healthy user growth and purchase frequency, ultimately contributing to increased market share and business scale. However, she acknowledged that these initiatives may not have a significant impact on profits, emphasizing the logic of JD.com’s business model, where profits are a natural outcome of expanding market position and creating value for users.
Ian Su Shan, JD.com’s chief financial officer, echoed Xu’s sentiments, stating that subsidies and marketing activities are tools for user operation and should be utilized in a targeted and disciplined manner.
Looking ahead to 2024, JD.com plans to maintain price competitiveness and expand into lower-tier and offline markets by leveraging its supply chain capabilities. Additionally, the company aims to expand its global footprint, with a potential acquisition of U.K. electronics store Currys under consideration to facilitate entry into the European market.
JD Property, JD.com’s infrastructure development and management platform, is also expanding its presence in Southeast Asia and Europe, focusing on markets such as Vietnam, Indonesia, Singapore, the U.K., and the Netherlands. The platform primarily serves fast-moving consumer goods (FMCG) giants and emerging Chinese companies expanding overseas.
