JD.com Inc (京東) aims to create seven listed firms with market values of at least US$14 billion apiece, outlining aggressive targets spanning two decades as it wrapped its signature sales gala for this year with another record haul.
Sales volume during its “618” June online bargains event, which concluded on Sunday, reached an all-time high, the company said in a WeChat post yesterday.
The summer online sales event, in which larger rival Alibaba Group Holding Ltd (阿里巴巴) also participates, is an important barometer of Chinese consumer spending that is often compared with Black Friday and the Alibaba-created Nov. 11 event.
Photo: Reuters
Chinese retail sales grew 12.7 percent last month, but were down from April and less than projected. Along with disappointing data on unemployment and investment, that suggests the world’s second-largest economy is struggling to regain its footing.
JD launched a US$1.4 billion discounting program in March — hoping to lock in consumers and fend competitors such as PDD Holdings Inc (拼多多) and ByteDance Ltd (字節跳動) ahead of a broader recovery later this year.
That spending spree in turn signaled to investors that JD might be placing a market share grab before profitability, helping wipe nearly 40 percent off its value since a peak in January.
However, it is also helping buoy growth at a critical time.
JD retail head Xin Lijun (辛利軍) told Bloomberg Television last week he expects the company’s core e-commerce business to accelerate this quarter after the company posted its lowest-ever pace of overall revenue expansion during the January-to-March period.
Over the weekend, JD also disclosed its longer-term vision for a sprawling business that spans logistics, healthcare, e-commerce and online finance.
It is targeting seven listed firms with a market value of at least 100 billion yuan (US$13.97 billion) each, the company said in a letter to employees.
JD already has several listed affiliates including JD Health International Inc (京東健康) and JD Logistics Inc (京東物流), both in Hong Kong. This year, another two subsidiaries — Jingdong Property Inc (京東智能產發) and Jingdong Industrials Inc (京東工業) — submitted listing applications to the Hong Kong Stock Exchange.
China’s No. 2 online commerce firm also aims to have three companies with sales exceeding 1 trillion yuan and net profit of more than 70 billion yuan, it said on Sunday.
It is to pay out more than 3 trillion yuan in salaries and benefits for frontline staff over the next two decades. The Chinese tech firm also plans to pay 100 billion yuan in taxes and provide more than 1 million jobs, while it is targeting five businesses to be included in the world’s top 500 companies.
“618 shopping festival preliminary reports from e-commerce platforms have been better-than-feared thus far, helped by platforms’ focuses on price competitiveness, increased small/medium-sized merchants participation and higher engagement from content,” Goldman analysts wrote.
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