JD.com’s quarterly profit halved as the Chinese e-commerce giant continued its costly push into the highly competitive food-delivery space, challenging established players Meituan and Alibaba Group.
Net profit for the second quarter slumped 51% to 6.18 billion yuan, equivalent to about $861 million, though it beat analysts’ expectations of 3.625 billion yuan. The figure was also sharply lower than the 10.89 billion yuan recorded in the first quarter.

Revenue grew by a better-than-expected 22% to 356.66 billion yuan. Retail sales, which make up the bulk of the company’s revenue, rose 21%, while logistics sales increased 17%.

“We saw robust growth in user traffic, quarterly active customers, and user shopping frequency on JD’s platform,” Chief Executive Sandy Xu said. That was driven by sustained momentum across both the core retail business and new businesses including food delivery, she said.
JD.com, whose business is mainly focused on e-commerce, diversified into food delivery in February as part of a strategy to gain market share in the fast-growing sector.

Since then, it has been locked in a price war with Meituan and Alibaba’s Ele.me in a bid to capture users. Aggressive promotions have persisted even after pledges to cut back on food-delivery subsidies following regulators’ warning, which analysts said could squeeze the company’s profits in the second quarter.
Its adjusted net profit, which excludes share-based compensation and fair-value changes of long-term investments, among other items, fell 49% to 7.39 billion yuan for the three months ended June.