Despite widening its net losses, Chinese e-commerce giant has offered an optimistic outlook thanks to higher sales in the second quarter.

For the three months to the end of June, net losses from continuing operations amounted to CNY2.21bn (US$334.4m) from CNY287m a year earlier. The company is hoping that moving the management of its warehousing assets to a separate unit will help offset substantial technology investments as it battles for market share against rival Alibaba.

However, net revenues for the quarter were up 31.12% to CNY122.3bn, while service revenues jumped 51% to CNY11.8m. And product sales surged 29.4%. said the cost of revenues increased by 31.3% in the period to CNY105.8m due to the growth of the company’s direct sales business, costs related to the logistics services provided to merchants and other partners, as well as traffic acquisition costs directly related to online marketing services provided to merchants and suppliers.

“We are pleased to see continued healthy performance in the second quarter, with solid revenue growth and improved margins in our core JD Mall business,” said CFO Sidney Huang. “Our new business initiatives continue to gain impressive traction across the industry. We will maintain a balanced, long-term approach to investing in the technologies that will define the future of retail.”

Net revenues for the third quarter are expected to be between CNY104.5bn and CNY109bn, representing a growth rate of between 25% and 30% compared with the third quarter of 2017.

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