(Yicai) Aug. 15 -- JD.Com's shares fell after the Chinese e-commerce giant said its net profit halved in the second quarter, dragged down by losses from new businesses, including food delivery.

JD.Com [HKG: 9618] was trading down 4.4 percent at HKD119.60 (USD15.26) as of 11.15 a.m. in Hong Kong today. Its New York-listed stock [NASDAQ: JD] dropped 2.9 percent to USD31.58 yesterday.

Net profit shrank 51 percent to CNY6.2 billion (USD863.5 million) in the three months ended June 30 from a year earlier, the Beijing-based company said in its latest earnings report released yesterday. Revenue rose 22 percent to CNY356.7 billion (USD49.8 billion).

Revenue from new businesses, including JD Food Delivery, tripled to CNY13.9 billion (USD1.9 billion) in the period. However, related operating costs and expenses totaled CNY14.4 billion and CNY14.5 billion, respectively, generating an operating loss of CNY14.8 billion.

JD.Com's marketing expenses surged 128 percent to CNY27 billion (USD3.8 billion) in the period, mainly due to the increased spending in promotional efforts for new businesses, especially JD Food Delivery.

Despite that, JD Food Delivery continued a healthy growth trajectory. Its daily order volume during the 618 shopping festival exceeded 25 million, with over 1.5 million quality merchants on board. By the end of the second quarter, the platform had more than 150,000 full-time delivery riders.

"JD Food Delivery made healthy progress during the quarter in metrics such as order volume growth, merchant base expansion, full-time rider recruitment, and, more importantly, synergies with retail and other existing businesses of JD.Com, having successfully achieved our initial strategic goals," Chief Executive Officer Sandy Xu said.

After JD.Com entered the food delivery business in March, Meituan and Taobao intensified investment in instant retail, leading to fierce competition.

"From JD.Com's perspective, we believe that these excessive competitive practices have not led to business model innovation nor brought incremental value to the industry," Xu said during the earnings conference call. "Instead, they have to some extent disrupted the industry's pricing system and caused many problems for merchants, making them unsustainable."

The food delivery business is deeply integrated into JD.Com's overall business ecosystem, Xu noted, adding that it is generating synergistic value with the company's core e-commerce business.

JD Food Delivery has brought significant traffic and user growth to JD.Com, with user activity, the number of users, and shopping frequency increasing, Xu explained. "The conversion rate of food delivery users purchasing JD.Com's core e-commerce categories has also continued to rise, particularly in categories such as supermarkets, where we have observed a large amount of cross-buying."

JD Retail

JD Retail, which includes the e-commerce business, as well as JD Supermarket and JD Mall, reported a revenue of CNY310.1 billion in the second quarter, an increase of 21 percent from a year earlier, with revenue from electronics and home appliance sales climbing over 23 percent.

On July 31, JD.Com unveiled plans to acquire Germany's Ceconomy, the parent company of consumer electronics retailers MediaMarkt and Saturn, for EUR2.2 billion (USD2.5 billion).

"We believe that the brand strength, supply chain capabilities, and market position that Ceconomy has established in the European market are of great value to JD.Com," Xu said. "Our online e-commerce operations and technological capabilities can complement their strengths."

JD.Com's international business will focus more and more on supply chain capabilities, she noted, adding that the company will seize the opportunities for high-quality Chinese brands to go global while adhering to localization, building local retail and e-commerce businesses, establishing local teams, procurement, and shipping, and forming long-term win-win partnerships with local market players.

JD Logistics

JD Logistics continued to strengthen its leading position in the Chinese integrated supply chain markets, with its global smart supply chain network planning to ramp up its overseas warehousing capabilities.

Revenue from this business rose 17 percent to CNY51.6 billion in the second quarter from a year earlier.

In June, JD Logistics launched a self-operated express delivery brand in Saudi Arabia, JoyExpress, officially commencing local delivery operations. JD Logistics now has warehouses in 23 countries and regions.

Editor: Futura Costaglione