Chinese ecommerce giant JD.com beats estimates for quarterly profit

Chinese e-commerce giant JD.com beat estimates for quarterly profit on Thursday, helped by a mid-year sales festival and aggressive price cuts that drove more cost-sensitive consumers to its platform.
 

US-listed shares of the company rose 2.6% in premarket trading.
 

Major Chinese vendors like JD.com and Alibaba have increased focus on discounting and lower-priced goods as the world's second largest economy sees a pullback from customers that as conscious about spending.
 

Excluding items, JD.com's second-quarter profit rose 73.7% to 9.36 yuan per share, compared with estimates of 6.07 yuan, according to LSEG data.
 

JD.com's general and administrative costs reduced by 9.6% in the quarter.
 

Customers are reigning in costs, in response to a stuttering post-COVID recovery, which helped boost low-cost e-commerce players such as PDD Holdings.
 

This increase in competition has led to a bruising price war between larger rivals as they look to attract the same pool of customers.
 

Retailer's rely heavily on major discounting events such as China's mid-year e-commerce sales festival which took place in June, to boost overall growth and exposure.
 

The so called "618" shopping event, named after the June 18 founding date of e-commerce provider JD.com , but embraced by all platforms, gauges the market sentiment among household consumers.
 

JD.com said in June its turnover and order volumes reached a new high over the festival period, which ran from the end of May to June 18 this year.
 

The company's total revenue rose 1.2% to 291.40 billion yuan ($40.71 billion) in the second quarter, compared with estimates of 292.89 billion yuan.

($1 = 7.1585 Chinese yuan renminbi)

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Maju Samuel)