China's number two online seller, JD has been winning market share from its largest rival even as profits have remained elusive. The New York-listed company slid back into a loss last quarter - after its only profitable quarter since its IPO in 2014. Revenue grew at a better-than-expected 44 percent, the company said this month. Management raised guidance for this year’s adjusted net income margin to between 0.5 and 1.5 percent - excluding items such as share-based compensation.

Things are looking up in other ways. The company spun off its unprofitable finance unit. And it is hiring out its extensive logistics infrastructure, creating a new revenue source. Unlike Alibaba , which doesn’t own its own delivery network, JD has an advantage in areas like groceries and daily goods.

One big fear for JD is that Alibaba, with about three-quarters of online sales in China, could launch a punishing discount war. Bernstein estimates that half of JD’s operating profit this year could be at risk in such a scenario.

So JD is enlisting help wherever it can. In one eye-catching development, JD says it would cooperate with China’s biggest search engine, Baidu. The two will share consumer data and users will be able to buy goods from JD directly on Baidu’s app.

This matters because Tencent is already JD’s largest shareholder with an 18-percent stake, and means China’s second-, third- and fourth-biggest internet companies are joining hands to fight Alibaba. Tencent owns WeChat , China’s most popular social network, with nearly a billion monthly active users.

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