Aug 14, 2019 (China Knowledge) - China's second-largest e-commerce group, JD.com, reported net revenue of RMB 150.3 bln in Q2 2019, exceeding the market expectations of RMB 147.5 bln based on data provider Refinitiv's polling. Meanwhile, JD.com reported a net profit of RMB 618.8 mln in Q2 2019, improving from a net loss of RMB 2.21 bln in the year-earlier period.
The company attributed its better-than-expected growth to increased electronics sales. Chinese government subsidized home appliance purchases to boost consumption. JD.com's annual shopping festival in June 18th also lifted revenue.
JD.com, known for serving China's middle class with high-end products, has shifted its focus to lower-income consumers in recent years. The company has spent heavily on expanding its logistics network into smaller cities.
The move comes as China's economic growth hit 27-year low. Official statistics show that China's economic output rose only 6.2% in Q2 2019. City residents have begun curtailing spending amid sluggish growth. Per-capita consumption for urbanites increased by 5.7% in the second quarter, compared with 6.6% in rural China.
As of June 30, JD.com's user base increased to 321.3 million people from 310.5 million in the last quarter. Roughly 70% of its new users come from smaller cities and Chinese villages, according to the company.
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