JD.com has swung back into the red amid its second quarter nearly doubling loss forecasts as it shifts its warehouse and assets to another unit.
The Chinese retail behemoth reported a loss of $334.4 million (£262.8 million) for the three months since April, nearly double the $177 million loss Reuters’ analysts predicted.
This is not the first time in this year the company has swung to a loss, and reportedly reflects significant investments in technology as it battles with its smaller rival Alibaba, alongside slowing sales.
Sales during the period came in at 159 billion yuan (£18.2 billion), up 33 per cent compared to last year, and expects the next quarter to see growth of between 25-30 per cent, slightly below average estimates.
In an effort to stem losses and offset increasing investment, JD.com is transferring its warehouse and warehouse management to a new unit, which according to its chief financial officer Sidney Huang, will begin to show visible revenue increases within the next year.
“(These) initiatives are yet to provide meaningful financial results but we believe we’ve made good traction since doubling down on technology last year,” he said.
“We expect the monetization of our logistic properties, when realized, will compensate part or all of the additional investments.”