- China’s No. 2 online mall expanded deeper into non-electronics
- Company increased spending on marketing for mid-year promotion
JD.com Inc. posted a wider quarterly loss as China’s second-largest online mall boosted marketing spending to drive sales at its mid-year shopping promotion.
In the three months ended in June, the net loss of 496.4 million yuan ($74 million) was almost double the 252 million yuan loss of a year earlier. Second-quarter sales jumped 44 percent to 93.2 billion yuan, helped by a partnership with backer Wal-Mart Stores Inc. The shares fell in pre-market trade.
JD.com is striving to grow its share of online sales against Alibaba Group Holding Ltd. and smaller players such as Vipshop Holdings Ltd. as it moves beyond a traditional focus on electronics. The Beijing-based company is investing heavily in delivery networks in Indonesia to expand into Southeast Asia while also promoting its own online shopping festival to drive growth.
“Marketing expense is up 63 percent year-on-year and that makes sense if they’re going to push for the Shopping Day sales,” said Kirk Boodry, an analyst at New Street Research. “It was a bit mixed but I think people are looking at the topline more at the moment and the GMV was encouraging.”
GMV stands for gross merchandise volume — the total value of goods sold across its platforms — which surged 46 percent.
JD Chief Financial Officer Sidney Huang said income was eroded by increased shopping subsidies and more marketing spending to attract new customers. It also fulfilled prior promises to spend more on new warehouses to expand its logistics networks. Warehouse space grew by 1.3…