What’s Going On Here?Online retail giant JD.com reported better-than-expected results late last week, after China proved it’s ready, willing, and able to lean into a digital future. What Does This Mean?The pandemic’s driven a drop-off in window shopping, sure, but JD.com’s been happy to make the most of the spike in Windows shopping: the online retailer reported an expectation-beating 31% sales jump last quarter. Still, investors weren’t exactly delighted to hear it’ll be spending big to maintain and expand its delivery network, which they’re worried will eat into the company’s profit. JD.com might take issue with that, mind you: the second-biggest Chinese ecommerce retailer’s in-house delivery network is exactly what sets it apart from the biggest, Alibaba, which relies on third-party couriers. Why Should I Care?The bigger picture: Chinese ecommerce is where it’s at.
The shift to online shopping is one of the trends that’s expected to outlast the pandemic, and China looks like it’ll be leading the way. This year, in fact, it’s forecast to make 52% of its retail sales online – a big jump from 2019’s 29%, and an even bigger one from the 15% and 13% expected this year in the US and West Europe (tweet this). Better still, that would make China the first country where more sales are made online than in person. And when you consider that favorable backdrop, it might make sense why 92% of authors on data platform Nobias Financial are feeling positive about JD.com’s stock.
For you personally: You can now buy into South Korea’s biggest ecommerce player.
The country with the next-best ecommerce rate is South Korea, with 29% of retail sales expected to be made online this year. That probably worked in Coupang’s favor late last week: the so-called “Amazon of South Korea” – which almost doubled its revenues in the past year – saw its shares climb 41% on its debut on the New York Stock Exchange. | 