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What Could Drive JD.com’s Sales in 2019 and Beyond?


May. 7 2019, Updated 8:49 a.m. ET


JD.com (JD) is an e-commerce giant in China (FXI) with a market cap of $35 billion. Also known as “China’s Amazon” (AMZN), JD.com will likely benefit from the expanding e-commerce market in China. According to an e-Marketer report, China’s e-commerce sales are estimated to grow 30% to $1.99 trillion this year. Almost 35% of the total sales in China will be online in 2019.

China will likely account for 55.8% of the total e-commerce sales this year. JD.com has a 25% share in China’s e-commerce market. Domestic giants like JD.com and Alibaba (BABA) will likely benefit from growing spending by China’s expanding middle class.

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Although China’s GDP growth is slowing, it’s still estimated to rise 6.0% this year. In June of 2018, Google (GOOGL) announced an investment of $550 million in JD.com to take advantage of China’s growing market.

Similar to Amazon, JD.com is also looking to open physical stores in China. China’s retail market is expected to overtake the US this year. JD.com is set to open at least one million stores across the country.

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International expansion

JD.com has entered emerging markets in South East Asia including Vietnam, Indonesia, and Thailand. A more than likely partnership with Walmart (WMT) will give the company access to the US market as well.

Strong sales growth estimates

JD.com is expected to increase its sales by 18.9% to $81.55 billion in 2019 and by 16.5% to $95 billion in 2020. JD.com has grown its sales at a compound annual growth rate of 34% in the last two years.


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