Shares of JD.com (NASDAQ: JD) fell 11% on Tuesday as investors grew increasingly concerned that the Chinese e-commerce leader would soon embark on a potentially costly strategy to win back market share from its rivals.
Now that the Chinese government has eased its COVID-related restrictions and reopened its economy, the country's online retail giants are reportedly gearing up for an intense battle for e-commerce supremacy, according to Bloomberg.
Investors are worried that intensifying competition will hurt JD.com's profits. The company is reportedly planning to implement a roughly $1.5 billion subsidy campaign to improve its prices and strengthen its standing as a low-cost e-commerce platform. Although the purported subsidies would likely boost JD.com's sales, they could also dent its profit margins.
Source Fool.com