How To Invest In Chinese E-Commerce Without Jack Ma
There is no denying that Alibaba (BABA -1.00%) is a formidable power in China, but the business is currently experiencing rough waters as a result of remarks made by co-founder Jack Ma. He blasted the regulators in a speech in October, and Beijing reacted quickly.
Executives from both companies were asked to appear before authorities, and Alibaba has been the focus of an antitrust inquiry. Alibaba's separation of Ant Group was abruptly halted. Ma has been avoiding the spotlight for more than two months as a consequence, which first led some people to fear he was gone.
Investors might think about JD.com (JD 2.79%) if they want to invest in Chinese e-commerce without all the controversy.
By revenue, JD.com is China's largest online retailer, although Alibaba is more of a reseller. While Alibaba's stock increased 10% in 2020, JD.com's stock increased 150%, making JD the clear victor of the two.
Significant client growthmore than 100 million new users joined JD's e-commerce platform last year, bringing the total to 442 millionwas a major contributor to the company's success. Due to this, third-quarter sales jumped by 29%, while net income rose by more than 1,000%. What's more, free cash flow increased 120-fold.
JD Plus, a service offered by the business known as Amazon of China, is comparable to Amazon Prime. More than 20 million people are members of this paid-for membership, and they get exclusive discounts, affordable delivery, and improved customer support.
JD.com was able to fulfill the extraordinary increase in e-commerce demand brought on by the pandemic because ofthe magnitude of the firm and its logistics and delivery network. With more than 80% of new customers from more rural sections of the nation, JD.com is growing its user base.
By investing in JD, investors get access to more than simply e-commerce. Several of the company's fastest-growing divisions are being considered for spinoffs, with majority ownership remaining. There are three of them: JD Digits (its fintech business), JD Logistics, and JD Health, which mixes telehealth services with pharmaceutical items.