JD.Com Inc., China’s No.1 retailer by web sales in the Internet Retailer 2016 China 500, today reported its sales grew 55% to 129.3 billion yuan ($20.1 billion) in the quarter ended March 31 versus the same quarter a year ago.

However, growth slowed down from the 99% sales growth in Q1 last year. The company attributed the slower quarterly growth to the unusually big increase in sales last year that followed JD.com’s alliance with China Internet giant Tencent Group and reducing marketing spend on low-margin virtual products, such as collecting charges for telecom operators, chief financial officer Sydney Huang told analysts on a conference call.     

JD still grew at twice the rate of e-commerce in China, Huang added.

China’s largest marketplace operator, Alibaba Group, reported last week that Q1 sales on its Chinese marketplaces increased 24% to $115 billion, making the value of consumers’ purchases on its China marketplaces, mainly Taobao and Tmall, about five time larger than sales on JD.com. But JD.com’s growth rate was double that of Alibaba, its main competitor. (While Alibaba accounts for a majority of online purchases in China it is not ranked in the China 500 because it is not the merchant of record for sales, instead providing platforms where other retailers sell.)

JD.com, like Amazon.com Inc., both sells merchandise directly to consumers and allows other merchants to sell on its site. Consumers bought 76.2 billion yuan ($11.7 billion) worth of goods directly from JD.com and also purchased 53.1 billion ($8.1 billion) worth of products from marketplace merchants, an increase of 50% and 63%, respectively, compare to Q1 2015.

The top sales category on JD.com was electronic products like smartphones and laptops, which represent about 52% sales on JD.com. Sales of electronics totaled 67.5 billion yuan in Q1, an increase of 56% from the same quarter in 2015.

JD.com also reported its revenue increased 47% to 54.0 billion yuan ($8.4 billion), compared with 36.6 billion yuan in the same quarter of 2015.

JD.com attributed its sales and revenue growth primarily to increases in active customers and orders. Consumers placed 342.1 million orders on JD.com in Q1, with 72% of those orders coming from mobile devices.

“We had a solid first quarter of the year with healthy growth in revenues, new users and mobile traffic,” says JD.com CEO Richard Liu. “JD.com’s commitment to authenticity and unwavering focus on the best user experience continue to win the trust of China’s growing middle class, helping us to once again outperform the industry. With our growing reputation as China’s leading online retailer and more top brands discovering the value of partnering with JD.com, we are very excited about the opportunities ahead.”

For the first quarter ended March 31, JD.com reported:

Revenue of 54.0 billion yuan ($8.4 billion) up 47.5% from 36.6 billion yuan in Q1 2015.

Net loss of 867.2 million yuan ($134.5 million) compared with a loss of 710.2 million yuan in Q1 2015.

(Source: internetretailer.com  Author: FRANK TONG)