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Investing.com-- JD.com shares surged to a four-month high on Wednesday after founder and chairman Liu Qiangdong said the company plans to roll out a hotel development model by the end of this year, but stressed that it has no ambition to spark a price war in the hospitality sector.
At a company event late Tuesday, Liu said JD.com intends to support hotel operators through its supply-chain infrastructure to reduce operating costs, offering high-quality back-end services rather than entering into cut-price competition, according to media reports.
Hong Kong-listed shares of the company surged as much as 6.5% to HK$138.4 by 05:38 GMT, reaching their highest level since mid-May.
“We don’t want to drag the hospitality industry into a price war,” he said, adding that if JD earns 1 yuan in profit, it would take about 70 percent while leaving the rest to its partners.
He also pledged half of that profit would go toward workers and the other half toward sustainable development, reports showed.
The announcement builds on the success of JD Travel, the e-commerce group’s lifestyle and travel platform. The company has introduced a membership program that allows hotel partners to join under a zero-commission model for up to three years.