JD.COM Inc aims to create seven listed firms with market values of at least US$14 billion (RM65.1 billion) apiece, outlining aggressive targets spanning two decades as it wrapped its signature 2023 sales gala with another record haul. 

Sales volume during its “6.18” June online bargains event, which concluded on June 18, reached an all-time high, the company said in a WeChat post on June 19. The summer online sales event, in which larger rival Alibaba Group Holding Ltd also takes part, is an important barometer of Chinese consumer spending that’s often compared to Black Friday and the Alibaba-created Nov 11 event. 

Chinese retail sales grew 12.7% in May but were down from April and less than projected. Along with disappointing data on unemployment and investment, that suggests the world’s second-largest economy is struggling to regain its footing. Still, Beijing is prioritising economic growth and once again allowing its giant private sector to expand, after a two-year clampdown that obliterated growth in sectors such as online commerce. 

JD kicked off a US$1.4 billion discounting programme in March — hoping to lock in consumers and fend competitors such as PDD Holdings Inc and ByteDance Ltd ahead of a broader recovery later this year. That spending spree in turn signalled to investors that JD may be placing a market share grab before profitability, helping wipe nearly 40% off its value since a January 2023 peak. 

But it’s also helping buoy growth at a critical time. Retail chief Xin Lijun told Bloomberg Television two weeks ago he expects JD’s core e-commerce business to accelerate this quarter (2Q23) after the company posted its lowest-ever pace of overall revenue expansion during the January to March period. 

“Despite intensified competition and restructuring impact, we believe JD’s overall 6.18 performance is likely to have exceeded our initial 2%-5% year-on-year (YoY) growth estimate,” Citigroup analysts wrote. “We estimate possible 6%-8% growth YoY this year. If true, this could translate to upside risks to our conservative 2Q23 JD forecast.” 

Two weeks ago, JD also disclosed its longer-term vision for a sprawling business that now spans logistics, healthcare, e-commerce and online finance. 

It’s targeting seven listed companies with a market value of at least 100 billion yuan (RM64 billion) each, the company said in a letter to employees. JD already has several listed affiliates including JD Health International Inc and JD Logistics Inc, both in Hong Kong. This year, another two subsidiaries — Jingdong Property Inc and Jingdong Industrials Inc — submitted listing applications to the Hong Kong Stock Exchange. 

China’s No 2 online commerce firm also aims to have three companies with sales exceeding one trillion yuan and net profit of more than 70 billion yuan, it said on June 18. 

It will pay out more than three trillion yuan in salaries and benefits for frontline staff over the next two decades. The Chinese tech firm also plans to pay 100 billion yuan in taxes and provide more than one million jobs, while it’s targeting five businesses to be included in the world’s top 500 companies. 

“618 shopping festival preliminary reports from ecommerce platforms have been better-than-feared thus far, helped by platforms’ focuses on price competitiveness, increased small/medium merchants’ participation and higher engagement from content,” Goldman analysts led by Ronald Keung wrote. — Bloomberg 

• This article first appeared in The Malaysian Reserve weekly print edition