Alibaba Group, the China-based e-commerce giant is thought to be one of the largest online retailers in the world with its astonishing 2014 initial public offering making international headlines. However, the less known JD.com could soon become the Amazon of the East. Last year, standing after Alibaba, the online site “JD” collected 24.7% share of the business-to-consumer market.
JD beats all expectations on both top and bottom line
The given data was on the basis of transaction volume but in terms of revenues, the JD.com is beating Alibaba. The revenue of JD totaled over $11.6 billion whereas the top line of the e-commerce giant came in at $7.7 billion. The e-commerce company should be watching JD closely now given its outstanding growth displayed on its financial statements and stock chart.
On March 2, the JD released its fourth-quarter report and beat almost all expectations on both the bottom and the top lines. Revenue of the online retailer climbed 47% in local currency whereas earnings of 6 cents a share climbed 171% over the previous year.
In the press release while announcing results, Sidney Huang, JD.com’s chief financial officer, said, “We’re delighted to report very strong top and bottom line growth for the quarter, and margins continued to benefit from the rapidly expanding scale of the JD.com platform.” Huang added, “We remain committed to investing in technology and customer service to drive long-term sustainable growth across our established and emerging business areas.”
Alibaba should look out for JD.com to maintain its top position in China
In logistics and fulfillment, the online retailing site “JD” is making huge investments and it has been able to increase the amount of orders filled per quarter significantly. The total fulfilled orders ramped 43% to 505.7 million in the fourth quarter.
In a March 9 report HSBC analyst Chi Tsang said the investments of JD in logistics and fulfillment pose large barriers to entry for competitors and provide economies of scale. In the report, Tsang said, “If JD.com can achieve a leading market share in (consumer goods), it should also be profitable.”
Further, the company has been using hi-fi technologies like drones for deliveries, etc. Since November, JD has been conducting tests of the drone delivery program in rural China. In addition to this, in December, the JD.com is also adding voice shopping functionality to its DingDong A1 smart speakers, just like Amazon did with its Alexa-enabled Echo devices.
Tsang thinks JD is “well suited to meet the rising demand for high-quality products.”