On Tuesday, Chinese e-commerce specialist JD.com stated that its board of directors has approved a new share buyback plan worth $5 billion (€4.48 billion) starting in September, designed to enable the Chinese e-tail giant to buy back a sizeable share of its capital over the next 36 months. In the meantime, JD.com’s largest shareholder, Walmart, is considering selling its stake.

Last week, Walmart announced plans to sell its entire stake in the group, worth $3.7 billion, in order to concentrate on its own activities in China. Walmart bought an initial stake in JD.com in 2016, and gradually increased its shareholding.

The news follows the report of higher-than-expected profits by JD.com in Q2, and coincides with the Chinese group’s attempts to quell investors’ concerns about the Chinese market’s slowdown by launching extensive share buyback operations, like some of its competitors, for example Alibaba, are doing.

It is the second announcement of this kind made by JD.com, after a $3 billion buyback programme heralded in March. In February, Alibaba announced a $25 billion plan of its own.

Chinese consumers have been reducing their expenditure in the face of the country’s weak macroeconomic performance, the prolonged downturn in the housing market, and concerns about job security, prompting JD.com to regularly feature discounts and promotions.

All major Chinese e-commerce groups are competing fiercely to grab their slice of the world’s largest e-tail market.

On Monday, after PDD Holdings, which manages the international operations of discount retailers Pinduoduo and Temu, published weaker-than-expected results, the share price of JD.com and Alibaba were also negatively affected.

In fiscal 2023, JD.com reported a revenue of RMB1.084 trillion (€136 billion), up 3.6%. Notably, the group’s net income jumped from approximately €1.2 billion to approximately €2.9 billion in one year.

(with Reuters)