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JD.com's Asia No. 1 Shanghai Jading Logistics Park facility in Shanghai, China, March 1, 2020. /VCG
China's JD.com forecast at least 10 percent rise in revenue on Monday for the coronavirus-hit first quarter, benefiting from partnerships with supermarkets for delivering fresh produce and groceries to shoppers choosing to stay indoors due to fears of infection.
The forecast, although lower than expected, is in sharp contrast to that of bigger rival Alibaba Group, which warned last month that e-commerce revenue would fall in the current quarter as the virus disrupts economic activity in China.
JD's shares were up six percent even as broader markets were headed for another volatile day of trading on fears that the fast-spreading virus could lead to a global recession.
The company said it had partnered with over 50 supermarket chains as well as nearly 30 community grocery chains in China for home delivery in coronavirus-hit areas. It reported strong customer growth in China's lower-tier cities.
"While large ticket durable goods and discretionary products have been negatively affected by the outbreak, the consumer staple categories, such as groceries, fresh produce, health care and household products, are in greater online demand during the past five weeks," Chief Financial Officer Sidney Huang said.
JD was able to resume full operations very quickly after the Chinese New Year due to investments in its supply chain and logistics network, the company said.
"JD has invested heavily into controlling its distribution, whereas Alibaba has largely subcontracted," said Brock Silvers, managing director at Hong Kong-based Adamas Asset Management.
"That may or may not have been the best call during normal times, but during this coronavirus outbreak it has been a significant benefit."
JD's estimated revenue of at least 133 billion yuan (19.09 billion U.S. dollars), according to Reuters calculations, fell short of analysts' average expectation of 137.32 billion yuan.
The company's total net revenue rose by 27 percent to 170.68 billion yuan in the fourth quarter, which ended December 31. Analysts were expecting revenue of 166.72 billion yuan.
Sales from JD's product unit, which includes online retail sales, surged by about 25 percent to 149.71 billion yuan.
(With input from Reuters)
