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JD.com, an ecommerce major in China, has officially kicked off a US$1.4 billion campaign to offer discounts across its online shopping platforms.
The company announced the program on its official WeChat account, showing deals for products like iPhones and Dyson hair dryers. The discounts will apply to items sold by both third-party merchants and self-operated stores.
The firm’s subsidy plans were reported last month. When the news first broke, stocks of both JD.com and Pinduoduo – an ecommerce peer known for competing on low prices – sank due to worries over an emerging price war.
As for Alibaba Group, chair and CEO Daniel Zhang said that the company hasn’t been a low-price competitor and doesn’t intend on becoming one.
“Price subsidies are nothing new,” he said in the tech titan’s most recent earnings call. “But I think if you take a clear-eyed look at history, nobody, no player ever has managed to achieve that kind of turnaround by relying on price subsidies.”
JD.com’s campaign comes as it hopes to capture more of the ecommerce market now, expecting China’s economy to recover more from the impacts of Covid-19. The country, however, has just announced a growth target of only 5% this year, which is one of its lowest in decades.
JD.com is scheduled to to announce its fourth quarter earnings for FY 2022 this Thursday.
See also: Alibaba U-turns on Jack Ma’s prophecy
Editing by Thu Huong Le and Dhania Putri Sarahtika
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