JD.com Profit Slumps as Heavy Food-Delivery Spending Bites — Update

By Tracy Qu

JD.com's quarterly profit slumped despite a rise in revenue, as the Chinese e-commerce giant's push into the highly competitive food-delivery space and other new businesses continued to bite.

The Beijing-based company has been locked in a food-delivery price war with Meituan and Alibaba Group as it tries to win market share, fueling concerns about thinning margins and near-term profitability.

The online retailer said Thursday that net profit for the third quarter dropped 55% from a year earlier to 5.28 billion yuan, equivalent to about $742.3 million. Analysts had expected 2.87 billion yuan, according to a FactSet consensus.

Adjusted net profit, which excludes share-based compensation and fair-value changes of long-term investments, among other items, fell 56% to 5.80 billion yuan.

Revenue for the period increased 15% to 299.06 billion yuan, exceeding analysts' expectation of 294.45 billion yuan.

The revenue and adjusted net profit were "better than feared" and the loss from new initiative segment was "broadly in line with expectation," Citi analysts said in a research note.

JD.com, which still considers e-commerce its primary business, has moved quickly to gain a foothold in the food-delivery sector. It entered the fast-growing market earlier this year, using heavy subsidies to lure customers away from Meituan, the market leader, and Ele.me, the No. 2 player.

Retail sales, which account for the bulk of the company's revenue, rose 11%. Logistics sales increased 24%.

Chinese regulators have since cracked down on price wars in the food-delivery sector, and all three companies have vowed to scale back discounting. Despite the pledges, aggressive promotions have continued. In a campaign this month, JD.com offered 10 million hot meals for just 0.01 yuan each, with many other dishes priced from 9.90 yuan.

The moves have proved costly, with heavy spending causing the company's profit to halve in the second quarter. Ahead of the third-quarter earnings release, analysts estimated that JD.com's food-delivery losses either steadied or narrowed from the preceding quarter.

"Heavy subsidy spending continues to weigh on the industry, eroding unit economics," said Third Bridge analyst Jamie Chen in a recent research note. "Subsidy intensity is expected to ease gradually after the third quarter before platforms shift their focus to unit economic discipline next year as budgets tighten."

Facing competition from Alibaba and PDD Holdings in China, JD.com is also increasing its spending on its international business and budget shopping platform Jingxi. "We expect Jingxi, the low-price initiative, to see triple-digit topline growth with losses expanding to over 1 billion yuan in 3Q," HSBC analysts said in a research note.

"For overseas expansion, losses may also increase as JD stepped up investment to develop local-to-local e-commerce in the U.K., France and Germany," they added.

JD.com's Hong Kong-listed shares rose 8.3% in the third quarter amid broad positive sentiment in Hong Kong's stock market. Year-to-date, the stock has fallen 8.5%, underperforming the Hang Seng Tech Index's 34% gain.

Write to Tracy Qu at tracy.qu@wsj.com

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November 13, 2025 05:52 ET (10:52 GMT)