(Yicai) March 6 -- JD.Com’s profit halved last year mainly as a result of aggressive spending on subsidies to win over consumers in China’s fiercely competitive food delivery market, with the internet giant saying it plans to scale back investment in the business this year if competition stabilizes.

Net profit was CNY19.6 billion (USD2.8 billion) for the 12 months ended Dec. 31, compared with CNY41.4 billion the year before, the Beijing-based company’s earnings report showed late yesterday. Revenue rose 13 percent to CNY1.3 trillion (USD187.2 billion).

JD.Com launched its food delivery service in February last year to compete with market leaders Meituan and Alibaba-backed Ele.me. The move fuelled rapid user growth but also drove up operating costs. The company said its takeout service has attracted more than 240 million users and captured over 15 percent of the market since launching.

“Our new businesses progressed in line with our strategic roadmap, with food delivery steadily expanding in scale while narrowing sequential losses every quarter,” Chief Executive Sandy Xu said in a statement accompanying the results.

Although the food delivery business expanded quickly, heavy subsidies eroded profitability. Income from new businesses surged 157 percent to CNY49.3 billion, but operating losses widened to CNY46.6 billion from CNY2.9 billion the previous year.

Marketing expenses soared 75 percent to CNY84 billion, increasing to the equivalent of 6.4 percent of net revenue from 4.1 percent in 2024, mainly due to higher spending on new businesses.

JD.Com’s Hong Kong-listed shares [HKG: 9618] jumped 10 percent to HKD106.60 (USD15.50) today, while its US-listed shares [NASDAQ: JD] edged up 0.3 percent to USD25.47 each yesterday.

For the fourth quarter, JD.Com had a net loss of CNY2.7 billion, versus a profit of CNY9.9 million in 2024. Revenue rose 1.5 percent to CNY352.3 billion (USD50.4 billion) from a year earlier.

JD.Com aims to improve operating efficiency in its takeout business while maintaining healthy growth. If market competition remains stable, the company will likely reduce total investment in the segment this year, Xu said on its earnings conference call.

In the long term, takeout and on-demand retail remain important strategic directions for JD.Com, he noted. The company will continue improving operational efficiency and profitability while strengthening synergies with its core retail operations.

Food delivery has already helped JD.Com attract new users and increase purchase frequency, Xu noted, adding that the business is expected to generate additional value through cross-selling and advertising.

Editor: Emmi Laine