JD.Com Inc (ADR) (NASDAQ:JD) stock recently took a beating amid trade tensions between the US and China. The stock lost ground after the Wall Street showed concerns on increasing costs and intense competition. But we believe JD remains a strong retail stock, which has huge growth potential.
JD.Com Inc (ADR) (NASDAQ:JD) revenue in the first quarter jumped 33% annually during the first quarter, while its GMV (gross merchandise volume) jumped 30%. JD’s active customer count increased by a whopping 28%, to 301.8 million.
JD.com is a spectacular growth story. According to a latest report by BrandZ Retail report from Kantar and WPP, JD.com is the fastest growing retail brand, which a 94% rate. This growth rate trumps Amazon and Alibaba. JD increased its value in 2018 to $20.9 billion from $10.7 billion in 2017.
JD is quickly improving its stores and delivery channels. JD.Com Inc (ADR) (NASDAQ:JD) recently signed partnerships with Walmart and Chinese retailer Yonghui to expand its physical retail capability. JD.com last month said it is making drones that will be able to deliver products. The company said it has seven different types of delivery drones in testing or operation across four provinces in China.
JD.com recently made headlines after Google said it would invest $550 million in JD.com. In exchange for the investment, Google will receive 27 million newly issued JD.com Class A ordinary shares. Citi analyst Alicia Yap, commenting on the deal, said JD will be able to leverage Google’s shopping action platform to promote its site.
JD is also reported to be in talks with several retail companies, including 5 Retail Group, to re-launch its operations in Russia, from where it pulled out in 2016. Last month, Bloomberg reported that JD.com is planning to expand its footprint in Thailand. JD is reportedly building fleets in Thailand which it will use for deliveries.
Some JD.Com Inc (ADR) (NASDAQ:JD) bears believe that the stock is under threat from competition from Alibaba. But we believe JD.com has its own core growth markets which will remain unperturbed despite the growth of Alibaba. JD.com is also backed by a Chinese giant Tencent, which owns WeChat (messaging app with over 1 billion users). WeChat user data is integrated with JD’s shopper data and mobile apps. This data is one of the biggest assets of JD that will help the company monetize.
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Author does not have investment in stock discussed in this article.