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With its blockbuster 2014 initial public offering making international headlines, Alibaba is widely thought of as China’s e-commerce leader.

But it’s lesser-known JD.com (JD) that may more aptly fit the bill of being the Amazon (AMZN) of the East.

When it comes to transaction volume, JD captured 24.7% of the business-to-consumer market share last year, No. 2 behind Alibaba (BABA). But JD beats Alibaba on a revenue basis. In the fourth quarter, JD’s revenue totaled $11.6 billion, while Alibaba’s top line came in at $7.7 billion.

And with outstanding growth seen on its stock chart and financial statements, JD is one to watch. JD issued its fourth-quarter report on March 2, and beat expectations on both the top and bottom lines. Revenue jumped 47% in local currency, while earnings of 6 cents a share increased 171% from the prior year.

“We’re delighted to report very strong top and bottom line growth for the quarter, and margins continued to benefit from the rapidly expanding scale of the JD.com platform,” said Sidney Huang, JD.com’s chief financial officer, in the press release announcing results.

Big Investments

JD is making big investments in logistics and fulfillment, and the company has been able to significantly ramp up the amount of orders filled per quarter. In the fourth quarter, total fulfilled orders increased 43% to 505.7 million.

According to HSBC analyst Chi Tsang in a March 9 report, JD’s investments in logistics and fulfillment “pose high barriers to entry (for rivals) and provide economies of scale.”

JD has four business segments: apparel and home furnishings, cellphone and digital, home appliances, and fast-moving consumer goods. HSBC says the last is the only one operating at a loss, due to inferior scale.

“If JD.com can achieve a leading market share in (consumer goods), it should also be profitable,” Tsang said in the report.

There are other ways in which JD is holding its own against its higher-profile rivals.

The Drone Game

Take drones and home-assistant speakers. Not only Amazon can play that game.

JD also has started to use drones for deliveries, conducting tests of the program in rural China since November.

And much like Amazon with its Alexa-enabled Echo devices, JD added voice shopping functionality to its DingDong A1 smart speakers in December.

What also sets JD apart is its reputation for delivering quality products. Alibaba has gotten into hot water in the past for allegedly selling counterfeit goods.

Tsang believes JD is “well suited to meet the rising demand for high-quality products.”

Echoing that sentiment, Pacific Crest Securities’ Hans Cheng said in a March 23 report that one of JD’s competitive advantages is its brand image for authentic goods.

Going Mobile

With the proliferation of smartphones in China, mobile is a big segment for JD. Some 80% of total fulfilled orders in the fourth quarter were mobile-based.

Jefferies analyst Jessie Guo says JD is leveraging its relationship with Tencent (TCEHY), China’s social media leader.

“Synergy with Tencent remains strong with 25% of new customers coming from Tencent gateway,” Guo said in a March 3 report. Tencent owns the popular QQ mobile app.

JD shares have risen about 25% so far this year, and have presented several buying opportunities. Shares cleared a 29.33 buy point from a consolidation base on Feb. 10, then ran up to a 14-month high of 32.47 a few weeks later.

A second buying opportunity came with a successful test at the 50-day line on March 22. When a stock rebounds higher after nearing its 50-day, that can be considered an additional point at which to purchase shares.

The stock is now less than a dollar below its recent high, extended about 9% from the consolidation buy point. Shares were up more than 2% to 31.76 in morning trades Monday.

Finance Unit

The company announced in the fourth-quarter report that it was spinning off its JD Finance unit, which is scheduled to occur in the second half of 2017.

“We see sustainable profitability around the corner driven by margin expansion and an anticipated JD Finance spinoff,” Pacific Crest’s Cheng wrote.

HSBC’s Tsang says that with the $2.1 billion in cash raised from the sale, and increasing free cash flow generation through retaining of a share of future profits, “management would be interested in M&A that can provide a technology advantage”— though the analyst’s expectation is not for the acquisition of an ASEAN (South East Asian Nations) e-commerce play.

But as e-commerce becomes more and more of a global business, acquisitions may be key. Amazon is expanding its presence abroad, recently announcing the acquisition of Middle Eastern e-commerce company Souq.com for an undisclosed sum. And Alibaba is investing in e-commerce startup Paytm out of India, according to the Wall Street Journal.

Meanwhile, JD has its eye on developing new technologies. The company said in its fourth-quarter report that Chief Executive Richard Liu has a vision for JD as a “world-class technology leader.”

That includes the pursuit of artificial intelligence and big data to what Liu says will “help further transform the current business through improved efficiency and better user experience, while also laying the groundwork for future areas of growth.”

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