JD initiated a $3 billion stock repurchase program and reported a better-than-expected 3.6 percent rise in revenue, helped by a broader product lineup and price cuts to target cost-conscious Chinese consumers.

The online retailer reported sales of 306.1 billion yuan ($42.6 billion) from October to December, versus the average analyst projection for about 300 billion yuan. It green-lit a new three-year buyback program, aiming to assuage investors concerned about the Chinese e-commerce player’s growth potential. The amount matched the Beijing-based company’s previous program. Its shares rose 11 percent in pre-market trading in New York.

JD.com’s results come after calls from billionaire founder Richard Liu in December to fix deep-seated issues from poor merchant support to an overly pricey item list. The company, which traditionally focused on big-ticket items such as electronics, has since last year wielded discounts and added cheaper products to tap bargain-hunting during China’s economic downturn.

The Beijing-based company had adopted discounts to try and revive topline growth, which has remained mired in single-digits for about a year as China struggles with an uncertain post-Covid recovery. It’s offering consumers a wider choice of prices and product categories, aiming to reclaim ground lost to traditional rivals Alibaba Group Holding Ltd. and PDD Holdings Inc. as well as newer entrants like ByteDance Ltd.’s Douyin.

The battle has expanded beyond online shopping. Last week, JD slashed the fees it charges for cloud services in response to deep cuts from Alibaba, a move that could erode margins at both their internet computing arms.

It’s unclear if JD.com can galvanise its businesses at a time China’s grappling with several major issues, including an unfolding property crisis and stubborn deflation. Economic data, including retail sales, have disappointed in recent months. Net income was 3.4 billion yuan in the December quarter, compared with the 4.6 billion yuan estimate.

This week, Premier Li Qiang pledged the central government will promote consumer spending in electronics, appliances and even cars, though he stopped short of outlining specific policies.

“Our checks suggested JD saw solid trends in electronics and home appliances in 4Q, while general merchandise and supermarket categories were softer partially due to tough comps a year ago,” Barclays analyst Jiong Shao wrote before the results.

Amid mounting domestic challenges, Chinese e-commerce giants such as PDD and Alibaba are increasingly exploring overseas markets.

JD.com is considering buying UK electronics retailer Currys Plc, a deal that could grant it a foothold in Europe. That’s after the Chinese firm axed its shopping sites in Thailand and Indonesia about a year ago.

By Jane Zhang

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