Chinese e-commerce company JD.com reported a 3 billion yuan ($444 million) in losses for the first quarter of 2022, as Covid-19 lockdowns in China weighted on logistic and consumer spending.
In comparison, the company brought in a 3.6-billion-yuan net profit in the first quarter last year.
The resurgence of Covid-19 in the world’s second-largest economy since March has forced the government to close shopping malls, movie theaters, Gyms, restaurants, in top tier cities like Beijing, Shanghai.
Both online and offline businesses have taken a heavy lift from the surging costs in logistics, transports and warehousing after the local government imposed travel restrictions and quarantine measures.
In April, retail sales in China fell 11.1 percent, representing the biggest fall since the first Covid-19 outbreak in 2020.
“The pandemic has hit consumers’ income and confidence, overall consumption is sluggish,” JD.com CEO Xu Lei said.
The total revenue came in at 239.7 billion, beating analysts’ average estimate of 236.6 billion. However, the 18% revenue growth is the slowest year-on-year quarterly growth rate for JD since it went public in May 2014.
JD’s retail sector, its largest revenue generator, brought in revenue of 217.5 billion yuan in the first quarter, up 17% year-on-year.
JD’s logistics businesses, which is the second-largest unit, saw revenue rise 22% year-on-year to 27.3 billion yuan.
Sales for JD.com in the first quarter rose 18 per cent to 239.7 billion yuan, a record-low growth rate for the company since 2014.
In February 2022, JD’s biggest domestic rival Alibaba reported a 10% revenue growth for the fourth quarter of 2021, marking the slowest quarterly growth rate since its 2014 listing.
Meanwhile, China’s vice-premier Liu He said the government will support the development of the platform economy and private firms, and support technology companies in going public on domestic and overseas capital markets.
The statement signals Chinese regulators could ease regulatory supervision on the tech sectors.