Bulletin: JD.Com's Retail Margins Are The Key Credit Driver

This report does not constitute a rating action. HONG KONG (S&P Global Ratings) May 17, 2024--A key credit question for JD.com Inc. is whether the China-based e-commerce platform can improve margins on its fast-growing revenues in retail sales. In the meantime, other divisions are making up for margin loss in retail, supporting a solid financial profile over the next year. We believe JD.com's (A-/Stable/--) topline will continue to outperform overall retail sales trends in China. Its revenue rose 7.0% in the first quarter of 2024, in line with our full-year estimate and ahead of China's total retail sales (ex-petroleum) of 5.2%. General merchandise led growth as the grocery category regained its growth momentum. However, retail growth came at the expense

...May 17, 2024 This report does not constitute a rating action. HONG KONG (S&P Global Ratings) May 17, 2024--A key credit question for JD.com Inc. is whether the China-based e-commerce platform can improve margins on its fast-growing revenues in retail sales. In the meantime, other divisions are making up for margin loss in retail, supporting a solid financial profile over the next year. We believe JD.com's (A-/Stable/--) topline will continue to outperform overall retail sales trends in China. Its revenue rose 7.0% in the first quarter of 2024, in line with our full-year estimate and ahead of China's total retail sales (ex-petroleum) of 5.2%. General merchandise led growth as the grocery category regained its growth momentum. However, retail growth came at the expense of a lower threshold for free shipping and higher spending in promotional activities, notably the sponsorship of Chinese New Year Gala broadcast in the first quarter. These resulted in JD retail's operating income falling 5%...

Bulletin