Following the Chinese online retailer’s announcement that it would expand its share repurchase programme and report fourth-quarter revenue above predictions, JD.com shares surged 12% in premarket trade in the United States.

Aggressive price reductions helped stimulate demand from consumers facing an uncertain economy in the last three months of 2023, coinciding with the biggest annual Chinese shopping holiday known as “Singles Day”.

Due to China’s unstable economic growth, high rate of youth unemployment, and lower earnings for office workers, customers are becoming more frugal with their spending, which forces businesses like JD.com to provide steep discounts in order to boost sales.

The company will have a global footprint with a supply chain focus, according to CEO Sandy Xu Ran.

“Given that our business model and advantages are distinct from other platforms, our approach to global expansion will likewise be different,” said told analysts on an earnings call.

“Supply chain is the cornerstone of our international business development, and we will continue to expand our capabilities on the global market.”

When the business said last month that it was thinking about buying UK electronics store Currys, analysts noted that this further demonstrated JD.com’s efforts to increase its international footprint as a buffer against the fierce competition and lacklustre demand in the China market.

LSEG data shows that JD.com’s quarterly net sales was 306.1 billion yuan ($42.52 billion), versus the average forecast of 300.04 billion yuan by analysts.

Some analysts surmise that during the quarter, JD.com’s appeal to budget-conscious consumers has increased.

Investor fears were also allayed, analysts said, by the fact that it is doubtful that the “suspicious practices” were surfaced during an internal investigation of its Dada Nexus unit had a significant effect on the company’s total sales.

JD.com announced that throughout the following 36 months, until March 2027, it will repurchase up to $3 billion worth of its shares, including American depository shares.

Following a decline of more than 48% in 2023, its U.S.-listed shares have already dropped more than 26% this year.

The company’s net income attributable to shareholders increased by almost 13% to 3.4 billion yuan from 3 billion yuan the previous year.

(Adapted from EconomicTimes.com)