Are JD’s Logistics Investments Worth the Profitability Trade-Off?

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JD.com’s JD supply chain arm, JD Logistics, plays a critical role in powering the company’s core retail and new service segments. In the first quarter of 2025, it recorded 11% year-over-year revenue growth, driven by both internal demand and rising external client adoption. It contributed 16.2% of JD’s total revenues in the quarter. The business continues to invest heavily in automation across warehousing, sorting, transportation and last-mile delivery. These upgrades reflect JD Logistics’ shift toward long-term scalability. However, short-term profitability has been soft due to heavy investments in fulfilment capacity.

JD Property, the infrastructure arm supporting JD Logistics, recently launched its first overseas logistics asset in Dubai’s Jebel Ali Free Zone. It is rapidly developing a modern logistics network around the world to boost global trade and support its international growth. These heavy investments, despite current profitability pressures, suggest a calculated trade-off that could position JD Logistics for stronger margins and competitive advantage in the long run.

JD Logistics faces key competition from Alibaba’s BABA Cainiao and Amazon AMZN Global Logistics in the international logistics and supply chain space.

Founded in 2013, Cainiao was born out of Alibaba’s e-commerce ecosystem and has developed a smart global logistics network with end-to-end capabilities on a global scale. Alibaba’s Cainiao offers warehousing, shipping and order fulfillment for global brands entering China and for Chinese companies selling overseas.

Amazon Global Logistics is a door-to-door ocean shipping service that lets sellers move products from China straight to Amazon’s warehouses. It is part of Amazon’s larger supply chain system and helps reduce shipping costs with competitive rates.

Shares of JD.com have lost 24.1% in the trailing three months against the Zacks Internet – Commerce industry’s growth of 2.5%.

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From a valuation standpoint, JD currently trades at a forward 12-month P/E ratio of 8.01X, which is well below the industry’s 23.95X. It carries a Value Score of B.

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The Zacks Consensus Estimate for JD’s 2025 earnings is pegged at $3.81 per share, which has been revised downward by 16.9% over the past 30 days, indicating a 10.56% year-over-year decline.