What's going on?

JD.com posted better-than-expected earnings on Wednesday, as the likes of Starbucks served its business up to the thirsty Chinese ecommerce platform last quarter.

 

What does this mean?

JD.com � which counts tech giant Tencent and US retail ruler Walmart among its biggest investors � is second only to Alibaba when it comes to online shopping in China. And as the country�s economy roared back last quarter, there was certainly online shopping aplenty � particularly since pandemic-related travel restrictions remained in place over Lunar New Year.

That suited JD.com just fine. With customers splashing their cash and a number of brands � including Chinese-mad coffee merchants Starbucks and sport supplier Decathlon � launching virtual storefronts on its platforms, the company�s sales surged 39% compared to the same time last year.

Why should I care?

For markets: It takes money to make money.

While revenue rose, JD.com�s profit didn�t increase to the same extent. See, China�s ecommerce market � the world�s biggest � is fiercely competitive, and firms often sacrifice short-term profitability in favor of rapid growth. And with the likes of ByteDance and relative newcomer Pinduoduo now muscling in, even big dogs like JD.com are having to up their investment in new business lines to keep pace.

The bigger picture: Slow up, slowdown.�

After booming last quarter, Chinese consumer spending has started to taper off. Some slackening of the initial �post-pandemic� rush was to be expected, but data out this week revealed a surprisingly steep drop-off. While Chinese retail sales rose 18% in April compared to the same time last year, that was much lower than both the 26% economists had predicted and the 34% growth the country clocked back in March. Still, it could be a blip: experts reckon spending will gather pace in the months ahead.