Chinese eCommerce giant JD.com seems set to report stellar performance for the year 2020 if its H1 performance and surging earnings estimates are anything to go by.
In 2019, the company generated a total of $24 billion in revenue from its global customer base. According to the research data analyzed and published by ForexSchoolOnline.com, it is expected to triple the amount in 2020, surging to more than $77.6 billion.
Its estimated total sales for 2019 totaled $83.31 billion, and experts predict it to have a total of $103.77 billion in sales in 2020. It would mark an increase of 24.55%. This figure is expected to rise by 20.81% in 2021 to reach $125.36 billion.
In the trailing one-year period as of September 29, 2020, JD.com stock had posted a 169.95% return according to Marketwatch data. It outperformed the S&P 500 whose gains within the same period were 12.59%. Its year-to-date (YTD) growth as of the same date was 116.01%, against the benchmark’s 3.74%.
JD Revenue to Grow by 44.83% in Q3 2020 against S&P 500’s 50.17% Drop
When the tech-driven eCommerce giant reported its results for Q2 2020 on August 17, the net revenue was $28.5 billion. It marked an increase of 33.8% compared to the same period in 2019. Adjusted earnings per share were $0.50, an increase of 52.6% year-on-year (YoY).
According to analysts polled by FactSet, the sales revenue estimate was considerably lower, which was at $27.46 billion and $0.39 adjusted EPS earnings.
During the period, net sales revenue from general merchandise amounted to $9.1 billion, a 45.1% increase YoY. On the other hand, net service revenue totaled $3.2 billion, a 36.4% increase YoY.
Following the announcement of these results, which were significantly better than expected, JD shares reached an all-time high. In August 2020 alone, S&P Global Market Intelligence shows that the shares rose by 23.28%. Within the same month, the S&P 500 only rose by 7.01%.
Looking at the Zacks Rank estimate revisions for the stock suggests that analysts are highly optimistic. Within the past 60 days, 4 consensus estimates for the current year have moved up while none has moved down. And in the past 30 days, 1 has moved up and none have moved down.
Moreover, the JD.com growth estimate for Q3 2020 is 44.83% against -50.17% for the S&P 500. This is expected to increase more than five-fold in Q4 2020, to 225% for JD.com while the S&P 500 is predicted to shed 24.64% more. For the current year, the source shows an estimate for JD.com at 45.19% while the S&P 500 is expected to tumble by 20.12%.
China’s Retail eCommerce Sector to Grow by 16% in 2020
JD.com is a direct sales company operating online and is among the few emerging tech stocks that have outperformed FAANG stocks on a YTD basis. Over the 12-month period which ended on June 30 2020, its active customer base grew by 29.9%.
At a similar time in 2019, its active user base was 321.3 million strong, growing to 417.4 million in 2020. Similarly, the mobile daily active user count expanded by 40% over the same period.
Among the reasons for its stellar performance is China’s robust adoption of eCommerce. According to eMarketer, consumers in China are expected to spend over $2.090 trillion in 2020 on retail eCommerce. That would be a 16% increase YoY and 43% of the total retail sales in China in 2020.
One of the latest trends in the market is an emerging form of retail known as live-stream shopping. Though the trend has been part of the country’s culture for years, it has gone mainstream thanks to the COVID-19 pandemic.
In 2019, about 265 million people in China used live-streaming eCommerce to make a purchase. It translated to 47% of the country’s live stream viewers and 37% of its online shoppers.
According to Chinese government data, the first half of 2020 saw over 10 million eCommerce live-streaming sessions. In March alone, more than 560 million people watched shopping live streams in the country. Compared to June 2019, that was an increase of 126 million.
Data from iResearch shows that the market was worth around $66 billion in 2019. It could almost triple in 2020, to about $170 billion. JD.com is among the top eCommerce players that have already developed live streaming channels. According to China Marketing Insights, it has 44 million average daily users.
Alibaba’s Taobao Live is the dominant market player. During Alibaba’s Singles Day on November 11, 2019, the platform generated sales worth $2.85 billion. In 2019, Taobao Live had a 79% share of all live-stream eCommerce transactions. Douyin, China’s TikTok followed at a distance with 13% while Kuaishou (Kwai) was third with 8%.