On Tuesday, Chinese e-commerce specialist JD.com announced that its board had approved a new share buyback program worth $5 billion (€4.48 billion). The program is set to begin in September and will allow the Chinese e-commerce giant to buy back a significant portion of its capital over the next 36 months. In the meantime, Walmart, JD.com’s largest shareholder, is considering selling its stake.

Last week, Walmart announced it would sell its entire stake in the group, valued at $3.7 billion, to focus on its own operations in China. Walmart acquired an initial stake in JD.com in 2016 and has gradually increased its stake.

The news follows JD.com’s announcement of better-than-expected second-quarter earnings and coincides with the Chinese conglomerate’s attempts to allay investor concerns about a slowdown in the Chinese market by launching large-scale share buybacks, as some of its rivals, such as Alibaba, are doing.

It is the second such announcement by JD.com, after announcing a $3 billion share buyback program in March. In February, Alibaba announced its own $25 billion plan.

With the country’s weak overall economic performance, the ongoing downturn in the real estate market and concerns about job security, Chinese consumers have been cutting back on spending, so JD.com regularly offers discounts and special offers.

All major Chinese e-commerce groups are competing fiercely for their share of the world’s largest e-tail market.

After PDD Holdings, which manages the international businesses of discounters Pinduoduo and Temu, released weaker-than-expected results on Monday, the share prices of JD.com and Alibaba also suffered.

In the 2023 fiscal year, JD.com recorded sales of 1.084 trillion RMB (136 billion euros), an increase of 3.6%. In particular, the group’s net profit rose from around 1.2 billion euros to around 2.9 billion euros within a year.

(with Reuters)