JD.com’s fourth-quarter profit of 9.9 billion yuan marks its highest quarterly earnings since 2021 and signals a sharp turnaround from challenges faced over the past two years. The company’s full-year revenue for 2023 grew 3.7% to 1.08 trillion yuan (US$152 billion), though its annual profit figures were not disclosed in the preliminary report.
Analysts noted that the quarterly revenue jump of 13.4%—up from 306 billion yuan in 2022—outpaced projections, suggesting JD.com is regaining market share in a competitive sector dominated by rivals like Alibaba’s Taobao and Pinduoduo. The company’s focus on mid- to high-income shoppers and its reputation for reliable delivery services have helped it capitalize on China’s consumption recovery.
Cost-Cutting and Efficiency Drive Results
JD.com has aggressively reduced expenses over the past year, streamlining operations and scaling back underperforming business units. This includes downsizing its overseas ventures and optimizing logistics networks, which account for a significant portion of its costs. The company’s operating margin improved to 2.6% in the fourth quarter, up from 1.9% a year earlier.
“Our commitment to operational efficiency and customer satisfaction is paying off,” said JD.com CEO Sandy Xu in a statement. “We’ve made strategic adjustments to align with evolving consumer preferences, and we’re seeing positive results.”
China’s Consumption Landscape Shows Signs of Life
The stronger earnings come as China’s economy grapples with slower GDP growth and a property market downturn. However, retail sales rose 7.4% in December 2023, indicating cautious optimism among shoppers. JD.com’s performance aligns with broader trends, as government stimulus measures and eased COVID-19 restrictions have encouraged spending, particularly during holiday shopping seasons.
The company’s core retail business, which includes its online marketplace and brick-and-mortar stores, accounted for most of the revenue growth. Its logistics division, JD Logistics, also reported improved profitability due to higher order volumes and cost controls.
Challenges and Competition Remain
Despite the upbeat results, JD.com faces pressure from price-conscious consumers shifting to budget platforms like Pinduoduo. To address this, the company has expanded discount sections on its app and offered subsidies for everyday items. It has also invested in live-streaming sales—a rapidly growing segment in China’s e-commerce market—to attract younger shoppers.
Looking ahead, JD.com plans to prioritize technology upgrades and supplier partnerships to maintain its momentum. However, analysts warn that China’s uneven economic recovery and intense industry competition could limit near-term growth.
“JD.com’s focus on quality and speed differentiates it, but sustaining this pace will require balancing discounts with profitability,” said Ming Lu, a Shanghai-based retail analyst. “The next few quarters will be critical.”
With consumer spending still below pre-pandemic levels in many sectors, JD.com’s ability to adapt to shifting demand will determine its trajectory. For now, its latest results offer a hopeful sign for China’s retail sector—and a reminder of the resilience of its largest players.