National Subsidy Taper and Mounting Losses Put JD.com (京东) on the Back Foot

Growth stalls as subsidies fade

JD.com (京东) ended 2025 with sharply slower growth and deeper losses as China’s home-appliance subsidies tapered and a costly push into on-demand delivery weighed on margins, according to Chinese business publication Huxiu. Fourth-quarter revenue reportedly rose just 1.53% year over year to RMB 352.3 billion, a stark deceleration from the double-digit growth seen earlier in 2025. Operating loss widened to RMB 5.849 billion in Q4, while net profit swung to a loss of RMB 2.7 billion amid lower investment gains. For the full year, revenue reached RMB 1.3 trillion, up 13%, but non-GAAP net profit fell more than 40% to RMB 27 billion.

Policy shifts hit electronics; other lines can’t fully offset

The main drag? Electronics and home-appliance sales reportedly fell 12% in Q4 after several provinces shifted “national subsidy” distribution from first-come-first-served to lotteries or limited-time coupons, curbing demand. Gains elsewhere—daily essentials up 12%, platform and advertising services up 15%, and logistics up 23.6%—only just kept the top line in positive territory. Looking to 2026, rising prices for memory and key commodities such as copper and aluminum could lift average selling prices, but will that offset weaker volumes? The uncertainty is compounded by ongoing global trade frictions and export controls that continue to reshape electronics supply chains.

An expensive bet on delivery—and rivalry

JD’s new businesses—food delivery, bargain marketplace Jingxi, and overseas expansion—remain heavy loss-makers, with a Q4 operating loss of RMB 14.8 billion and a full-year loss of RMB 46.6 billion, Huxiu reported. Management says investment in delivery has narrowed quarter-on-quarter for four straight quarters, with Q4 spending down about 20% from Q3, and expects lower outlays in 2026—contingent on competition. The strategy is clear: lure new users with subsidies. JD launched 0% commissions for restaurants and pledges to keep rates at no more than 5% long term; it will scale in-store pickup and group-buy deals nationwide, reportedly targeting 1 million eateries. But Alibaba (阿里巴巴) and Meituan (美团) are not standing still. It has been reported that Alibaba is subsidizing orders via its Qwen app and urging teams to “boldly” grow instant retail with a multi-year loss tolerance.

Users surge, stores multiply, Europe beckons

JD says annual active users surpassed 700 million by Q4 2025, with quarterly actives and purchase frequency up more than 30% year over year—momentum that helped attract higher-margin brands and ad spend even as electronics softened. Offline, JD expanded JD MALL to 26 locations and lifted JD Electronics city flagship stores past 110, while over 4,500 JD-branded 3C digital shops now dot China; instant “JD Fashion Express” reportedly onboarded 1,000-plus brands from Anta to Bosideng. With RMB 225 billion in cash and short-term investments at year-end, JD also has room to go abroad: its Joybuy Europe marketplace has begun trial operations in six countries and is slated to launch officially in March. The subsidy war may cool in intensity, but the question lingers: who blinks first in China’s bruising instant-retail and delivery race?