As the largest players in their respective markets, Alibaba (NYSE: BABA) and Amazon.com (NASDAQ: AMZN) have garnered investor attention, both growing more than 100% over the past several years. In the wake of this gold rush, China’s highest quality direct-to-consumer company, JD.com, has lagged.
JD’s strategy has been simple; invest all earnings back into the company for growth, rather than turning short-term profits. Sacrificing in the short term to build a strong moat is an aggressive strategy, however the payoff potential is enormous. Other companies to successfully implement this approach include Salesforce.com (NYSE: CRM), and the above-mentioned Amazon.com.
JD is only 1/9th the size of Alibaba by market cap, but from an investment perspective, bigger is not always bigger. JD continues to fly under the radar by focusing exclusively on building and strengthening its distribution network. It has managed to grow revenues by nearly 40% annually, consolidating its positioning as the best direct-to-consumer retailer in China. While Alibaba manages its eBay-style marketplace and ancillary products/services, JD is silently positioning itself as the Amazon of China.
About the O&G Research Team
The O&G Research Team holds Series 65 and Series 3 certifications and are experienced traders in international financial markets.
Follow us on WeChat:
Read new articles and updates everyday on your phone!
- We are long some of the companies mentioned on this website;
- We are not responsible for the content on any external links on this website;
- The opinions expressed in this report do not constitute a buy or sell recommendation.