Shares of JD.com (JD 6.12%) tumbled in 2023 as the Chinese e-commerce company continued to report disappointing results and sluggish growth, and China's economic recovery also came up short.
According to data from S&P Global Market Intelligence, the stock finished last year down 49%. As the chart below shows, most of the sell-off came early in the year, though the stock finished 2023 near its low point as investor sentiment on the stock has taken a dive.
JD.com goes from bad to worse
Like other Chinese tech stocks, JD began the year with investor optimism. China's economy was expected to recover from the pandemic after it lifted its zero-COVID policy at the end of 2022, but that didn't happen.
Meanwhile, JD reported disappointing results throughout the year and lost market share to Pinduoduo parent PDD Holdings, which significantly outgrew JD.
The company started off the year with some bad news, saying it would close its e-commerce sites in Thailand and Indonesia, indicating that its global ambitions need to take a step back.
In February, the company announced a $1.5 billion subsidy program in order to better compete against PDD, a sign that profit margins were likely to fall. However, those efforts haven't paid off -- revenue growth actually decelerated over the course of the year, going from 7.1% in the fourth quarter of 2022 to just 1.7% in the third quarter of 2023.
Investor sentiment continued to weaken due to increasing competition, and the company tapped a new CEO in May, Sandy Ran Xu, though that did little to change the trajectory of the business.
Toward the end of the year, JD.com founder Richard Liu acknowledged the challenges facing the company, saying it needed to take urgent action to fend off competition, and called on his employees to be more aggressive.
Image source: Getty Images.
What's next for JD.com
That call from Liu could lead to management changes in 2024 as the third-quarter earnings report marked another disappointment with revenue missing estimates.
JD is working to grow its third-party marketplace and that is helping to expand margins, but investors seem uninterested in this strategy if it means revenue is flatlining.
While the Chinese economy has been weak, PDD's revenue continues to soar, a sign that JD is not executing in a competitive environment. The stock could bounce back in 2024, but it's unclear what the catalyst for a recovery would be at this point.
