Chinese e-commerce giant JD.com's (9618) first-quarter net profit surged 53 percent to 10.9 billion yuan (HK$11.8 billion), despite its new business unit’s operations loss nearly doubling due to delivery business.
Quarterly revenue totaled 301.08 billion yuan for the quarter ending in March, up 15.8 percent from a year earlier, topping market estimates of 289.22 billion yuan, according to data compiled by LSEG.
Adjusted net profit rose 43.4 percent to 12.76 billion yuan from the same period a year ago, beating the estimate of 10.37 billion yuan.
The loss of new business expanded 98 percent to 1.33 billion yuan, from 670 million yuan in the first quarter in 2024.
Chief executive Sandy Xu Ran said buoyant consumer sentiment, alongside JD’s improved supply chain and user experience, has boosted the performance.
The company’s delivery unit, JD Takeaway, began onboarding restaurants in February with promises of "zero commissions all year round," marking its entrance into China's highly competitive food delivery space and threatening to disrupt the market share of leading players who rely on scale for success in this low-margin sector.
In late April, the company highlighted anti-competitive pressures on food delivery couriers in a social media post, alleging that other platforms were coercing couriers to avoid working with JD Takeaway.
Founder Richard Liu Qiangdong reportedly asked the company's food delivery unit to share its profit with stakeholders if earnings margins exceed 5 percent, with the newcomer in the mainland takeout market aiming to stick to its social responsibility-driven strategy.
Meanwhile, JD Logistics (2618) reported a net profit of 451 million yuan for the first quarter, up nearly 90 percent year-on-year. Revenue stood at 46.97 billion yuan, up 11.46 percent.
JD Health International (6618) reported a first-quarter profit of 930 million yuan, up by about 5 percent year-on-year, while revenue rose nearly 26 percent to 16.65 billion yuan.
STAFF REPORTER and REUTERS
