(Yicai) May 14 -- JD.Com's shares rose after first-quarter revenue at the Chinese online shopping giant increased at the fastest pace in three years and outdid expectations, thanks mainly to a boost from its new food delivery business and other initiatives.

After gaining by as much as 4.3 percent in Hong Kong earlier today, JD.Com [HKG: 9618] ended 3.4 percent higher at HKD141.60 (USD18.15) a share. Its New York-listed stock [NASDAQ: JD] ended up 3.3 percent at USD37.25 yesterday.

Revenue was CNY301.1 billion (USD41.5 billion) in the three months ended March 31, up 16 percent from a year earlier, the Beijing-based company said in an earnings report released yesterday. Analysts had forecast CNY289.4 billion.

Net income surged 53 percent to CNY10.9 billion (USD1.5 billion), while adjusted net profit jumped 27 percent to CNY13.7 billion, beating estimates of CNY12.6 billion. Net profit margin rose to 3.6 percent from 2.7 percent.

“We saw a strong start to the year, with solid results on both the top and bottom lines,” Chief Executive Sandy Xu said. “Our performance was supported by improving consumer sentiment and continued enhancements to JD's supply chain capabilities and user experience.”

The most dramatic shift in income came from JD.Com's new businesses segment, which added food delivery to its services, rising rose 18.1 percent to CNY5.8 billion (USD804.8 million), compared with a 19.2 percent year-on-year drop in the first quarter of last year. Its loss widened 94 percent to CNY1.3 billion.

JD Retail, the company's main business, saw revenue rise 16.3 percent to CNY263.8 billion last quarter from a year ago, up from 6.8 percent growth in the year-earlier period. Income at JD Logistics climbed 11.5 percent to CNY47 billion.

Food Delivery Services Expansion

In February, JD.Com made a high-profile entrance into the food delivery business with JD Takeaway. Daily orders have approached 20 million, and the platform has attracted more than one million merchants, with many more in the onboarding process, Xu pointed out.

Instant retail is a natural extension of the firm’s main retail business, and food delivery is one of the high-frequency services, she added.

Food delivery services should be viewed within the broader context of JD.Com's overall retail capability and service experience, Xu said on the company’s earnings conference call, adding that it enriches user touchpoints and enhances customer stickiness.

JD.Com has become the first platform in China to provide comprehensive social benefits for full-time food delivery riders, including the employer and employee portions of social insurance and housing fund contributions. It also provides accident and health insurance for part-time riders.

Food delivery is a long-term sustainable business for JD.Com, according to the company. As it grows, the firm expects to gradually achieve economies of scale, creating synergies with existing businesses, enriching location-based product offerings, upgrading its last-mile delivery network, and driving user growth, the company added.

AI Integration

JD.Com is progressively implementing artificial intelligence technology across retail and the entire supply chain, according to executives.

“We have widely adopted AI technology across various business scenarios, which is driven not only by the top-down initiative from the company, but also the bottom-up adoption and utilization by our employees," Xu said.

“Due to our differentiated business model, we have deeper knowledge in supply chain," leveraging JD.Com's operational data and diverse retail and supply chain use cases, she added.

JD.Com has restructured its search and recommendation systems through AI, improving search result satisfaction and traffic distribution efficiency. It also launched the AI shopping assistant Jingyan to offer users more product information and professional recommendations.

More than 14,000 AI agents are operating within JD.Com's internal systems. The firm has also brought in AI tools for merchants, covering the entire process from product launch and order management to customer support and data analysis, helping them enhance operational efficiency and cut costs.

Editor: Martin Kadiev