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JD.com Inc (NASDAQ:JD) – intensifying competition with Alibaba

JD.com Inc (NASDAQ:JD) stock is up 0.85% in today’s pre-markets trading at USD 26.10. The stock is trading 2.7% higher than its 50 day moving average of USD 25.41.

JD is China’s second biggest online market place and a longtime rival for Alibaba. On second quarter of 2016 JD had over 188 million customers (defined by someone who made at least one purchase during the previous twelve months). JD’s strength has been in consumer electronics, but it is increasingly moving to areas such as clothing that have typically been Alibaba’s strong hold. JD has called apparel the “most important growth engine” for the future.

Most recently JD has stepped up their game in liquor through strategic partnership with Bacardi. Under the strategic partnership, JD will offer spirit brands, including BACARDÍ® rum, GREY GOOSE® vodka, BOMBAY SAPPHIRE® gin and other leading brands in the Bacardi portfolio to the Chinese consumers. Some brands available exclusively through JD in China.

Additionally, JD has also established a strategic partnership with Tencent Holdings, which puts JD at the fingertips of the 650 million WeChat users.

JD’s business model is similar to Amazon’s. It handles much of the warehouse and delivery logistics. The company is still very much in investment mode. I.e. it continues to expand capabilities and marketing. Therefore, despite its rapidly growing revenues, it does not yet make a profit.

As the competition between JD and Alibaba intensifies, the margins for both companies may face pressure. However the two companies have a much differentiated positions and business models and can both prove to be a substantially profitable business over the period of time.

JD is part of Flioz China Shopping Boom portfolio. Get your own copy of China Shopping Boom portfolio from Apple AppStore. Download Flioz investment strategy app for iOS.

This JD information is courtesy of a premium China stock portfolios – created by WealthyTec – and offered through the Flioz mobile app for iOS.

About Jukka Blomberg

Founder & CEO of WealthyTec, Inc and author of How to Profit from China: https://www.amazon.com/gp/product/952936783X/

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