JD.com’s Q3 2025: Robust Revenue Growth but Margin Pressure from New Business Investment

Revenue Growth Hits 14.9%, Outpacing Segment Peers

JD.com posted RMB299.1 billion (US$42.0 billion) in net revenues for the third quarter of 2025, a 14.9% jump from the same period last year. The company credits healthy growth across its business lines, especially with JD Retail up 11.4% year-over-year, JD Logistics climbing 24.1%, and New Businesses surging 213.7% in revenue.

This growth story is underpinned by robust gains in both general merchandise and service categories. Marketplace and marketing revenues were up 23.7% to RMB25.7 billion, while logistics and other service revenues surged 35% to RMB47.3 billion. Notably, the number of annual active customers exceeded 700 million in October 2025, reinforcing JD.com’s competitive scale in China’s retail market.

Retail Margin Expands While Group-Level Profitability Faces Pressure

JD Retail’s operating margin increased to 5.9% (up from 5.2% last year), reflecting solid performance in its core electronics, home appliances, and newly accelerated categories like general merchandise and advertising. JD.com’s management credits targeted strategic initiatives—including traffic prioritization, channel expansion, and high-profile label launches like JD FASHION—for driving both operational efficiency and user engagement.

However, group-level profitability declined sharply, with net income attributable to ordinary shareholders dropping to RMB5.3 billion from RMB11.7 billion year-over-year, and non-GAAP net income at RMB5.8 billion, less than half of last year’s RMB13.2 billion. Non-GAAP operating margin plummeted to just 0.1%, compared to 5.0% last year. The main culprit: intensified investment in New Businesses, especially food delivery and overseas expansion, where operating losses widened.

New Businesses Fuel Topline Growth but Weigh on Operating Margins

The food delivery business delivered substantial growth and improved its unit economics quarter-on-quarter, with expanding merchant supply and GMV (gross merchandise value) growth. However, it remains a drag on group margins: operating margin for New Businesses plunged to -100.9%. Meanwhile, JD.com continued to build synergies between food delivery, core retail, and cross-category purchases.

Management emphasized that investments in new ventures are expected to mature over time, improving overall financial models. The push into categories such as apparel, general merchandise, and food delivery also represents a deliberate effort to diversify away from JD.com’s electronics-heavy historical base.

Cash Flow, Liquidity, and Share Repurchase Signal Commitment to Shareholder Returns

JD.com’s cash and equivalents totaled RMB210.5 billion (US$29.6 billion) at the quarter’s end, and free cash flow for the trailing twelve months stood at RMB12.6 billion. Notably, JD.com continued its aggressive share repurchase plan, buying back 80.9 million Class A ordinary shares (2.8% of shares outstanding as of Dec 31, 2024) for US$1.5 billion through September, with US$3.5 billion still authorized for future buybacks.

Operational Momentum: User Base Surpasses 700 Million and New Store Expansion

JD.com’s operational highlights included the expansion of JD MALL (now 20+ locations nationwide), entry into Hong Kong’s retail market, and strategic new label launches like JD FASHION for apparel and continued leadership in general merchandise. The logistics division strengthened its Middle East presence with the opening of the Dubai No.5 warehouse and established a regular cargo route to Singapore.

JD Health continued to roll out specialty medicines and forged partnerships with major pharma and medical device companies, aiming for broader healthcare integration and AI-enabled services.

Key Takeaway: Revenue Momentum Strong, But Margin Recovery Hinges on Execution of New Businesses

JD.com is making significant investments to expand its reach, diversify its product mix, and innovate through technology and supply chain expansion. While core retail remains profitable with improving margins, new business ventures—particularly food delivery and international logistics—are currently weighing on consolidated profits. Whether these bets pay off depends on management’s ability to balance growth and efficiency as these businesses scale.

For investors and market watchers, the critical questions ahead will be the pace at which new segments turn profitable and the impact of ongoing share buybacks. In the near term, margin pressure and volatility are likely to persist as the company navigates a changing retail and digital services landscape.

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