(Bloomberg) -- JD.com Inc. reported a better-than-anticipated 7% rise in revenue, after it slashed prices and ramped up shopper perks to counter fierce competition during a Chinese downturn.

The Beijing-based retailer’s sales climbed to about 260.1 billion yuan ($36 billion) in the March quarter, versus the average projection for about 258.4 billion yuan. That topline growth accelerated from 3.6% in the previous quarter. Net income rose a stronger-than-expected 13.9% to 7.1 billion yuan. Its shares rose about 4% in pre-market trading in New York.

JD.com’s results are seen as one of the key bellwethers of Chinese consumption, which has struggled to recover since the country lifted nearly three years of Covid curbs. The company has turned to discounting and other promotions to try and rev up sales, particularly in its traditional strength of consumer electronics. That helped it outpace larger rival Alibaba Group Holding Ltd., which this week reported a quarterly earnings dip that triggered a share selloff.

Read More: Alibaba Falters Again While Tencent Builds on Its Recovery

“The reaccelerated growth of general merchandise categories and resilient growth of electronics categories demonstrate effective turnaround of JD’s dominance in core categories,” Citigroup analysts wrote after the results.

Longer-term, the company continues to wrestle both China’s tepid economy and newer rivals such as PDD Holdings Inc. and ByteDance Ltd. 

While Chief Executive Officer Sandy Xu predicted that Beijing’s policies would shore up consumer confidence, growth in retail sales slumped in March and industrial output fell short of forecasts, in warning signs for the economy’s recovery this year.

JD.com Rises With Profits a Highlight of Results: Street Wrap

Apart from a discounting spree, the company in recent months has focused on amping up livestreaming commerce — an area of growth. JD nearly doubled salaries for some front-line staff and offered 1 billion yuan in subsidies and rewards to video content creators on its platform. 

It even trotted out a digital avatar of billionaire co-founder Richard Liu, hoping his name would juice sales ahead of the June 18 festival, China’s second largest online shopping event.

JD also intensified efforts to expand internationally as domestic consumer sentiment has remained sluggish — including weighing and then scrapping an offer to buy British electronics retailer Currys Plc. It touted its efforts in artificial intelligence with its own proprietary large language model, while following Alibaba with aggressive price reductions for cloud computing services.

What Bloomberg Intelligence Says

JD.com’s smaller-than-expected retail profit decline and 1% rebound in marketplace-advertising revenue growth may not be enough to allay concerns of persistent earnings erosion to rivals such as Alibaba and Kuaishou going into China’s 618 bazaar. Steeper losses from new businesses, including on-demand deliveries, affirms costlier order acquisition amid competition from Meituan and Douyin. 

- Catherine Lim and Trini Tan, analyst

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As with other Chinese tech firms, JD has stepped up its share repurchase program. It has bought back $1.3 billion worth of shares this year so far, and plans to buy back up to $3 billion worth of shares through March 2027. The company’s repurchases jumped sixfold in the first quarter, raising the likelihood of further buybacks this year, Bloomberg Intelligence estimates.

(Updates with analysts’ comment and share action from the second paragraph)

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