JD.com released its Q1 2026 financial results after the Hong Kong market closed on May 12th.
In terms of revenue, JD Group reported revenue of RMB 315.7 billion (USD 45.8 billion) for the quarter, representing a year-on-year increase of 4.9%. This figure surpassed both Goldman Sachs' previous forecast of 3% and the market's consensus expectation of 2%-4%.
Regarding profitability, JD Group's net profit attributable to ordinary shareholders was RMB 5.1 billion (USD 0.7 billion) for the quarter, a decrease of 53.15% from RMB 10.9 billion in the same period last year. Under non-GAAP measures, net profit was RMB 7.4 billion (USD 1.1 billion), down 43.5% from RMB 12.8 billion a year earlier. The market had generally anticipated a decline of 50%-60%.
The better-than-expected results were reflected in the stock price. JD.com's U.S.-listed shares rose over 4% in pre-market trading before settling with a 1.3% gain at the close. The following day, its Hong Kong-listed shares opened higher and climbed, at one point gaining more than 8%. The stock closed at HKD 128.200 per share, marking its highest price level since 2026.
However, this seemingly stable performance cannot mask the multiple pressures JD.com faces. The impact of the withdrawal of national subsidies is set to continue, core 3C and home appliance categories are experiencing weak consumption, and the profit outlook for new businesses—including JD Food Delivery, JD Property, Jingxi, and overseas operations—remains unclear. Furthermore, competition in the e-commerce industry is intensifying as players fight for market share. JD.com's path forward remains challenging.
Shifting Business Gears to Prioritize Profit Quality
It is widely known that JD.com, alongside leading 3C and home appliance manufacturers, was among the hardest hit by the "ebb tide" of national subsidies. Entering Q1 2026, the dual effects of "policy withdrawal and high base pressure" continued to unfold.
The financial report shows JD Retail's Q1 revenue was RMB 268.59 billion, a year-on-year increase of 1.8%. Within this, product revenue was RMB 244.819 billion, up only 1.0%, highlighting a significant divergence in category performance:
Electronics and home appliance product revenue was RMB 132.2 billion, down 8.4% year-on-year.
General merchandise product revenue was RMB 112.6 billion, up 14.9% year-on-year, accounting for 46% of product revenue and marking the sixth consecutive quarter of double-digit growth.
It is evident that the traditional core business of 3C and home appliances is no longer propping up half of JD Retail's revenue.
Looking at a longer timeline from Q1 2025 to Q1 2026, JD's 3C and home appliance segment revenue was RMB 144.3 billion, RMB 131.7 billion, RMB 144.8 billion, RMB 174.1 billion, and RMB 132.2 billion respectively, with corresponding year-on-year growth rates of 5.60%, -4.60%, 2.70%, 15.80%, and -8.40%.
Internet analyst Cao Rui pointed out that the decline in electronics categories is continuing due to overall weak consumption and the premature, excessive release of demand by national subsidies. Furthermore, performance in Q2 may face additional pressure from the high base effect.
In fact, JD's 3C and home appliance segment first experienced a year-on-year decline of 4.6% in Q2 2024, which caused significant internal concern at the time. The pressure was only alleviated when the national subsidy policy was implemented, releasing pent-up consumer demand.
Now, with the policy tailwind gone, a drop in revenue was expected.
However, this round of decline is not solely due to reduced demand following the subsidy withdrawal. Since March, the mobile phone and PC categories have seen significant industry-wide price increases due to rising global memory costs, further dampening consumer willingness to purchase. On the May 12th earnings call, JD executives explicitly stated that the scale and breadth of this price hike would indeed significantly suppress consumption demand in the short term.
The pressure on the core business is forcing JD.com to seek more "proactive" measures, both internally and externally.
Internally, a quiet "gear shift" in business structure centered on "profit quality" has been completed. Beyond product revenue, service businesses have become a new growth engine: in Q1, JD's platform and advertising revenue, combined with logistics and other service revenue, totaled RMB 70.875 billion, a year-on-year increase of 20.60%. Within this, platform and advertising service revenue grew 18.8%, and logistics service revenue grew 21.7%, both far outpacing the growth of the product business.
This structural adjustment, driven by the dual wheels of "general merchandise + services," is directly reflected in profit quality. Despite the slowdown in traditional retail growth, JD Retail's operating profit reached a record high: Q1 operating profit was RMB 15.0 billion, up 17.2% year-on-year, with the operating profit margin improving to 5.6%.
On the earnings call, CFO Shan Su explained, "The margin improvement primarily comes from two aspects: first, optimizing supply chain capabilities to improve gross margins for both electronics and general merchandise categories; second, continuous improvement in marketing efficiency, with the retail business's market expense ratio improving year-on-year for three consecutive quarters."
Externally, following its foray into food delivery, JD.com is still desperately searching for a second growth curve.
The Cost of an 8% Market Share: The Second Growth Curve May Lie Overseas
"The food delivery business will ultimately achieve profitability," CFO Shan Su stated firmly during the earnings call.
Indeed, as the focal point of external attention in this earnings report, JD Food Delivery did achieve a significant sequential reduction in losses. However, according to the current strategic pace, achieving profitability remains difficult.
The financial report shows that Q1 revenue for JD's New Businesses segment (including food delivery, Jingxi, and the international business JOYBUY) was RMB 6.279 billion, a year-on-year increase of 9.1%. The operating loss for New Businesses was RMB 10.352 billion, compared to RMB 14.8 billion in Q4 last year, representing a sequential loss reduction of nearly 30%. Industry analysts estimate that the food delivery business accounted for a loss of approximately RMB 7-8 billion within this. Based on an estimated 12 million daily orders over 90 days (totaling 1.08 billion orders), the loss per order is about RMB 6.9.
Securities analyst Zhang An indicated that Meituan's estimated unit economics (UE) loss for Q1 2026 is projected to be around -RMB 1.2 per order, while Alibaba's UE for the same period is approximately -RMB 3. He further expects Meituan's UE could turn positive by mid-year and show significant improvement in the third and fourth quarters. JD Food Delivery's UE gap with the other two players is substantial.
The food delivery business competes on intra-city order density, relying on volume to dilute various costs. Once market share shrinks and order volume declines, fixed fulfillment costs such as rider capacity and station operation and maintenance cannot be reduced proportionally, causing the cost per order to rise passively and making future profitability even more difficult.
Data confirms this situation. Although the absolute value of JD's New Businesses operating loss is gradually narrowing, the operating loss margin is simultaneously widening. From Q1 2025 to Q1 2026, JD New Businesses' operating profit margins were -23.1%, -106.7%, -100.9%, -105.1%, and -164.9%, respectively.
Despite the massive investment, a key reason JD.com finds it difficult to completely abandon the food delivery business is the value release from ecosystem synergies.
CFO Shan Su stated, "JD Food Delivery is not an independent business. We are accelerating the release of its synergistic value. It continues to drive healthy growth in JD's overall traffic and users. With operational improvements and the refinement of the advertising system, commission and advertising revenue generated from food delivery nearly tripled sequentially in Q1."
Public information shows that as of Q1, JD.com's annual active user count exceeded 740 million, with quarterly active users achieving year-on-year double-digit growth for ten consecutive quarters.
Beyond food delivery, JD's self-operated 7Fresh small kitchens have expanded to cover cities including Beijing, Shanghai, Guangzhou, Shenzhen, and Tianjin. In April of this year, JD Food Delivery also launched a group buying business, which has begun trial operations in the first batch of one hundred cities across China, involving millions of餐饮门店.
Furthermore, part of the losses generated by JD's New Businesses this year stems from investment costs related to the restart and expansion of overseas operations.
It is reported that in Q1, the European online retail brand Joybuy was officially launched, offering premium brand products, competitive prices, and极致 service. By the end of Q1, Joybuy's "211" service (delivery by 11 AM if ordered by 11 PM the previous day) covered over 30 major European cities and a population exceeding 40 million, achieving same-day delivery in Europe. JD Logistics' overseas express service, JoyExpress, was launched in core European markets,率先推出 the "211" high-timeliness service. Meanwhile, JD.com acquired Germany's Ceconomy, gaining over 1,000 physical stores,延续 its domestic asset-heavy model overseas. Additionally, it is understood that JD Worldwide has established the Haikou JD Daily Consumer Goods Duty-Free Shop, becoming one of the first five daily consumer goods duty-free shops in the Hainan Free Trade Port.
It is also noteworthy that JD.com is beginning to invest substantial capital to catch up in AI. According to the latest Q1 2026 report, its R&D investment increased by 59% year-on-year. However, based on the current business layout, these efforts appear more focused on empowering its own industries.
Conclusion
The capital market is never short of compelling narratives. Alibaba's story has fully pivoted to AI, while in JD.com's story—food delivery, general merchandise, overseas expansion, AI—each represents a tough challenge, and each journey is still ongoing.
For now, JD.com still lacks a single, clear growth path, but it has at least begun walking on multiple legs.
With food delivery continuing to reduce losses, deepening operations by leveraging its supply chain, and restarting its overseas business, the current strategic logic appears clearer than before. However, whether this布局 can truly cultivate a second growth curve remains to be seen over time.
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