JD.com posts first quarterly revenue decline in decade, beats estimates on extended 618 sales

JD.com, a leading Chinese consumer electronics and e-commerce platform, reported its first quarterly revenue decline in more than a decade, with total revenues falling 2.9 per cent to 346.4 billion yuan ($51.37 billion) for the quarter ended June. The contraction marks a notable shift for the company, which has historically benefited from consistent growth in the Chinese retail sector.

CEO Sandy Xu attributed the revenue decline to a high comparison base from the previous year and increased raw materials costs. However, she noted that momentum for electronics and home appliances began to pick up in June. Despite the top-line drop, the company exceeded analyst expectations, aided by a longer sales period for its annual 618 shopping festival, which ran for more days than the previous year to allow retailers deeper time to compete through discounts.

Financially, the company demonstrated resilience in profitability. Net profit rose to 7.1 billion yuan from 6.2 billion yuan in the same period last year, while non-GAAP net profit increased 20 per cent to 8.9 billion yuan. The results were bolstered by the extended promotional window of the 618 event, one of China’s largest online retail occasions marking the company’s founding anniversary.

Looking ahead, Xu expressed confidence that electronics and home-appliance sales would grow meaningfully in the second half of the year. She acknowledged that rising consumer electronic prices may continue to weigh on demand, but stated that difficult year-on-year comparisons should begin to ease, supporting growth in the category.

The revenue decline underscores broader structural challenges in reviving Chinese consumer spending. Weak consumer confidence, linked to concerns over job security and a years-long property sector downturn, continues to impact retail spending patterns. Following the announcement, U.S.-listed shares of JD.com fell 3.5 per cent.