JD.COM Inc. reported better than expected second-quarter revenue Tuesday, boosted by stronger sales in its online retail business, sending its shares 5 percent higher in pre-market trading.

The company’s net revenue rose 23 percent to 150.28 billion yuan (US$21.28 billion) in the second quarter ended June 30. Analysts were expecting revenue of 147.49 billion yuan, according to IBES data from Refinitiv.

JD.com’s upbeat results provided a bright spot in China’s e-commerce industry and wider tech sector, which is slowing down after years of growth.

Firms like JD.com and bigger rival Alibaba are seeking to diversify beyond online shopping to deal with the slowing growth.

JD.com has entered new businesses, such as convenience stores and supermarkets. It is also investing in AI to boost its logistics and advertising capabilities.

Last week, the company announced it led a US$142 million funding round in Xinchao Media, which runs ads in elevators across China.

The firm has also sought outside funding for several of its subdivisions, including its health division, its finance division and its logistics division.

Executives said that JD Logistics, JD.com’s business unit which oversees warehousing and delivery for itself and other merchants, broke even during the second quarter.

Industry analysts say that Chinese ecommerce firms have largely tapped China’s online spenders in the country’s first-tier cities, and must aggressively court consumers in less affluent parts of the county.

Jerry Liu, who tracks China’s Internet sector at UBS Investment Research Securities, said that China’s e-commerce industry has performed better than others anticipated since the start of the year. (SD-Agencies)