The result comes at a critical point for the ecommerce giant, which has invested heavily in warehouses and distribution networks but now faces a slowdown in Chinese consumer spending.

(Bloomberg)—JD.com Inc., ranked No. 4 in the Internet Retailer Online Marketplaces, posted fourth-quarter revenue ahead of estimates, as Singles’ Day promotions helped the Google-backed online retailer fend off competition despite a decelerating Chinese economy.

Sales for the three months ending December hit 134.8 billion yuan ($20.2 billion), surpassing the average projection of analysts. The Beijing-based company expects revenue this quarter of 118 billion yuan ($17.62 billion) to 122 billion yuan ($18.23 billion), versus the 118.9 billion yuan ($17.76 billion)  anticipated.

The result comes at a critical point for the ecommerce giant, which has invested heavily in warehouses and distribution networks but now faces a slowdown in Chinese consumer spending. Its business model relies on a rising middle class willing to pay more for faster delivery and other services, but trade tensions and a slowing domestic economy have driven users to cut-price rivals like Pinduoduo Inc. Annual active buyers reached 305.3 million in the year ending December, rising just 100,000 from the figure disclosed during the previous quarter.

JD’s outperformance on the topline, however, underscored the resilience of overall online sales versus physical retail, and the company’s ability to drive business through promotions.

“We are cautiously optimistic for the second half of this year when the government’s various incentive policies begin to take effect,” said JD.com chief financial officer Sidney Huang, adding that the slowing economy had impacted the sale of goods like electronic appliances. “We should see better cashflow this year.”

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In the fourth quarter, JD recorded its slowest ever increase in gross merchandise value, which refers to the total value of goods sold on its platform. It will stop giving this figure on a quarterly basis and instead release it once a year. But Huang said that rising costs in research and development and the expansion of the company’s 7Fresh supermarkets would be more carefully managed in 2019.

“What most people care about is the top-line growth and direct sales,” said Eric Wen, founder and CEO of Blue Lotus Capital Advisors, adding that his company’s market tracker showed strong Chinese ecommerce sales during 2019’s first quarter. “Overall, it was a good result.”

JD, whose billionaire founder Richard Liu was accused of rape last year though no charges were brought, has yet to post an annual net income. It’s taken steps to improve its bottom line by spinning off its finance division and selling shares in a logistics unit to help fund growth. It’s also trimming expenses, aiming to cull 10% of senior staff. But the company has also pledged to hire 15,000 new employees at a time many analysts are predicting slowing sales growth.

To help oversee its expanding logistics network, JD said it’s set up a property management fund with GIC Pte, Singapore’s sovereign wealth fund, with committed capital of 4.8 billion yuan ($717.1 million). JD will sell facilities to the firm carrying a gross asset value of some 10.9 billion yuan ($1.63 billion), freeing up capital for investment in growth areas, it said. The sales are expected to be largely completed this year.

“It can add a lot of value,” Wen said. “But I think you have to be careful. These kinds of related party transactions will need a lot of disclosure.”

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JD’s net loss for the quarter ended December hit 4.8 billion yuan ($717.1 million). However, the company booked a surprise profit on an adjusted basis.

“JD has seen continued solid growth in 2019 and reported solid Gross Merchandise Value growth in January,” CICC analyst Natalie Wu said in a note to clients before the earnings. “It remains to be seen whether the robust data is a recovery sign, or mainly due to the Chinese New Year effect.”

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