What’s going on?

• Online retail giant JD.com reported better-than-expected results, after China proved it’s leaning into a digital future.

What does that mean?

• JD.com’s been making the most of the pandemic, reporting an expectation-beating 31% sales jump in Q4/2020.
• While in-house delivery is what sets JD apart from Alibaba (which relies on 3rd-party couriers),  investors are worried that the big amount spent on maintaining and expanding its delivery network would eat into profit. 

Why should I care?

For markets: China’s leading the digital future

• The shift to online shopping is one trend that’s expected to outlast the pandemic, and China looks to be leading the way with its forecast to be the 1st country to have more sales online than in person (52% of retail sales online) – a big jump from 2019’s 29%, and US’s 15% and West Europe’s 13% expected this year.
• That might make sense why 92% of authors on data platform Nobias Financial are feeling positive about JD.com’s stock.

The bigger picture: South Korea is also catching up

• The next-best-ecommerce-rate country is South Korea, with 29% of retail sales expected to be online this year.
• That’s probably why Coupang (the so-called “Amazon of South Korea”), which almost doubled its revenues in 2020, saw its shares climb 41% on its IPO on the NYSE.

Content source: Finimize (2021) The Online Shoppers’ Republic Of China. Available at: https://www.finimize.com/wp/news/the-online-shoppers-republic-of-china/ [Accessed on Mar 13, 2021]