China’s second-largest e-commerce giant JD.com on Monday reported quarterly results that beat analysts’ estimates. The company’s total net revenue for the fourth quarter 2019 rose to RMB 170.7 billion (USD 24.5 billion) from 134.83 billion yuan (USD 19.3 billion) a year earlier, representing a 26.6% increase.
For the full year of 2019, it recorded RMB 576.9 billion (USD 82.9 billion) in revenue, an increase of 24.9% from that of 2018.
Net income attributable to ordinary shareholders for the year was RMB 12.2 billion (USD 1.8 billion), according to previous data, this is also the first annual profit the company made in its 22-year history.
Part of the reason JD.com posted such strong growth in the quarter past can be found in “Jingxi,” the company’s attempt to defend competition from Pinduoduo and tackle China’s less-developed areas, which largely refer to lower-tier cities and villages.
Ahead of last year’s annual Singles’ Day shopping extravaganza on November 11, JD.com launched “Jingxi” on WeChat as a mini-program. At the outset of its business, Pinduoduo also leveraged on WeChat’s huge user pool to gain early tractions amongst consumers.
Thanks to the exposure brought by China’s biggest chatting app, JD.com attracted 28 million new annual active consumers, 70% of which came from tier-three to tier-six cities in the country, in the last three months of 2019. Its user increase is even bigger than that of Alibaba, who owns China’s biggest e-commerce platforms, Taobao and Tmall.
As market growth saturates, the fight for a bigger share of the e-commerce market has turned fierce among Alibaba, Pinduoduo, and JD.com in recent years. Price-sensitive spenders from outside of big cities become a key source of user growth.
JD.com was once topped by Pinduoduo by market value in 2018 when its CEO Richard Li Qiangdong got involved in a rape scandal and the company fell into sluggish growth. After a tumultuous two years, the company has reclaimed its seat as the second-biggest e-commerce operator and the fourth-largest Chinese internet company by market value.