JD.com Profits Drop 53% Amid Food Delivery Investment

Last year, JD.com’s profits were cut in half as significant investments in China’s intense food delivery subsidy battle impacted earnings. The company indicated that it plans to cut back on investments moving forward if market competition stabilizes.

The Chinese e-commerce giant announced a net profit of 19.6 billion yuan (approximately $2.8 billion) for the year ending December 31, 2025, representing a 53% decrease from the previous year. Despite the profit decline, revenue increased by 13%, reaching 1.3 trillion yuan (around $187.2 billion), according to the financial statement released yesterday evening.

Despite the earnings drop, shares listed in Hong Kong surged 10% to HKD106.60 (about $15.50), while those listed in the U.S. rose slightly by 0.3%, closing at $25.47 yesterday.

The company’s aggressive expansion into food delivery, initiated in February last year to compete with industry leaders Meituan and Ele.me backed by Alibaba, spurred rapid growth in user numbers but also raised costs substantially. The food delivery service has attracted over 240 million users and captured more than 15% of China’s food delivery market since its launch.

While the business grew quickly, heavy subsidies used to lure users significantly impacted profitability. Revenue from new ventures, including food delivery, surged 157% last year to 49.3 billion yuan. However, operating losses jumped sharply to 46.6 billion yuan from 2.9 billion yuan (roughly $6.8 billion compared to $420.4 million in the previous year).

The company recorded a net loss of 2.7 billion yuan in the fourth quarter, compared with a profit of 9.9 million yuan a year earlier. Quarterly revenue increased 1.5% year-over-year to 352.3 billion yuan (about $50.4 billion).

Leadership expressed a focus on improving operational efficiency within the takeout segment while sustaining strong growth. If market competition remains steady, the company plans to decrease total investments in this area this year compared to last, according to the CEO during the earnings call yesterday.

Looking ahead, on-demand retail and food delivery continue to be key strategic priorities. The company intends to enhance operational efficiency and profitability while leveraging synergies with core retail operations, said the CEO.

Food delivery has already been effective in attracting new users and boosting purchase frequency, the CEO added. The segment is also expected to create value through cross-selling and advertising opportunities.