Sales grew 42% in Q2 and the total value of merchandise sold on the platform increased 47%.

(Bloomberg)—JD.com Inc.’s second quarter sales rose 42% to 65.2 billion yuan ($9.8 billion), beating analysts’ average forecast. The company benefited from selling a greater proportion of higher-margin products and gleaning more fees from merchants.

Gross merchandise volume, the total value of goods sold on the platform, rose by 47% to 160.4 billion yuan ($24.17 billion) in the June quarter, according to JD, No. 1 in the Internet Retailer 2016 China 500.

The company reported Wednesday that its net loss narrowed to 132.1 million yuan ($198.9 million), from 510.4 million yuan a year earlier, also better than projections.

“We discontinued over 22,000 merchants in the first half,” JD.com CEO Richard Liu said in a conference call after earnings. “By discontinuing these merchants we do suffer financial losses.”

Shares jumped as much as 10% to $24.60 in New York, the biggest increase since Feb. 16. The stock was down 30% over the past 12 months through Tuesday.

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Investors had been expecting revenue and margin pressure as the company weathers a record slowdown in smartphone and PC shipment markets. JD aims to woo shoppers via a direct-to-consumer model it says curbs counterfeits and subpar merchandise. The company, which traditionally focused on electronics gadgets, has revamped its product mix and is increasingly selling on behalf of third-party merchants.

“General merchandise products such as apparel and cosmetics generate higher margins; whereas [third-party] business brings commission fees,” Jessie Guo, an analyst at Jefferies & Co., wrote before earnings were released.

JD is taking over Wal-Mart Stores Inc.’s Yihaodian online commerce operation in China, forging a deal with the U.S. retailer that may eventually lead to a boost in sales and lower logistics costs. But that business will take time to integrate. The company forecast sales of 59 billion yuan to 61 billion yuan in the current quarter ending September, compared with the 61.3 billion yuan that analysts had expected on average, as the company anticipates slowing consumption growth.

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