JD.com and other Chinese tech firms' stocks saw a surge in early trading as investors reacted to a substantial stimulus injection and contemplated the potential for additional measures.
The People's Bank of China injected a record-breaking 800 billion yuan ($113 billion) into the banking system through one-year loans, according to Barron's. Moreover, Beijing and Shanghai introduced fresh measures to prop up the struggling property market, including reductions in down-payment ratios for home purchases and extended mortgage repayment deadlines. There are indications from state media reports that China may implement further policy adjustments to support economic recovery in 2024.
Investors remain upbeat despite Friday's mixed economic statistics, which saw retail sales outperform estimates but housing prices fall. November retail sales rose 10.1%, up from 7.6% in October but below the expected 12.5%, while Chinese house prices fell 0.2% year-over-year, the fifth straight month, and industrial production rose 6.6%, exceeding estimates.
This combination of stimulus measures and hopes for additional support in 2024 fueled the rise in stocks. Alibaba shares rose by 3.7%, and JD.com experienced a 7% jump in Hong Kong trading, while Baidu and PDD also saw increases in U.S. premarket trading. The market reaction reflects the delicate balance as investors navigate between the positive impact of stimulus and the ongoing need for economic support.
JD Logistics Launches Worldwide Express Delivery
The development comes as JD Logistics (JDL), a subsidiary of JD.com, has launched a new expedited shipping service for customers in Europe and the United States. TechTimes reported that JD Logistics' one-way international delivery service is initially directed towards the United Kingdom, Spain, Canada, Mexico, the US, France, and Germany.
Notably, several of these regions already house JDL warehouses, facilitating streamlined logistics. The initiative is consistent with the Chinese e-commerce behemoth's overall plan to promote global development.
Residents in Shenzhen and Guangzhou can access this service, with JDL expressing intentions to extend its coverage to more major Chinese cities soon, according to a company statement released on Friday.
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In October, JD Logistics introduced express delivery services in Hong Kong and Macau, heightening competition with Cainiao, Alibaba Group Holding's logistics arm, as per a report from Yahoo! Finance. The services encompass free door-to-door delivery in both cities and 4-hour express deliveries in Hong Kong.
As part of its efforts in the Greater Bay Area (GBA), JD Logistics successfully completed its inaugural international cargo flight between mainland China and Vietnam in September. This development allowed JDL to transport e-commerce parcels and agricultural produce between the two countries.
JD.com Commits To Service Improvement
The expansion into overseas delivery markets is crucial for JD.com, particularly as the company, alongside its rival Alibaba, grapples with challenges stemming from a faltering domestic economic recovery. The downturn in high-ticket and discretionary spending by Chinese consumers has impacted JD.com's sales growth, a company traditionally renowned for its premium offerings.
In response to internal challenges, Richard Liu Qiangdong, founder and chairman of JD.com, acknowledged mismanagement in a recent imemo. He emphasized the need for improvements, acknowledging the company's size and inefficiency.
"So many issues have emerged, certainly because I mismanaged," Liu noted in the internal memo.
In September, JD Logistics' air cargo unit further expanded its international reach by inaugurating a route connecting China to Vietnam.
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