Major losses at JD.com

JD.com, the Chinese online giant, has reported a net loss in the second quarter (Q2) of 2017. The losses were RMB287 million ($42.3 million). Revenues however were up 46.3% compared to Q2 2016 at RMB93.2 billion ($13.7 billion).

The online retailer put the losses down to continuing investment in building up its logistics services as well as marketing costs. JD.com have released a statement that says marketing expenses increased by 93% to RMB4.1 billion ($600,000) and fulfilment expenses increased by 39%to RMB6.4 billion ($900,000).

Commenting on the results, Richard Liu, Chairman and CEO of JD.com, said: “JD’s growing strength as China’s largest retailer continues to position us to capture new and expanding market opportunities.

“As we broaden our range of offerings, including a rapidly growing roster of top international brands, our customer base continues to expand, with female shoppers becoming an increasingly active user base. Looking forward, as JD’s smart technologies and big data help us revolutionize the online shopping experience, our ‘retail as a service’ initiative will further extend the capabilities of our platform to partners throughout China.”

These losses show that even at the top of the greasy pole it is still possible to make losses that can if one is not careful spin out of control. Whether this issue continues remains to be seen in future financial reporting so may either be a blip or a sign of something structurally unsound. If JD.com go under it would have ramifications across the world.

 
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