Alibaba and JD.com Show Weak Chinese Consumer Demand

Chinese e-commerce leaders Alibaba and JD.com released their quarterly results on August 15, revealing significant challenges in the consumer market. Alibaba reported a modest 1% increase in revenue from merchant commissions and advertising on its platforms for the quarter ending June 30, a stark decline from the 5% growth seen in the previous quarter. JD.com echoed these concerns, noting a year-on-year decline in average order value, attributing this downturn to "soft consumer spending." Alibaba's core e-commerce business, which includes Taobao and Tmall, experienced "high single-digit" growth in gross merchandise volume (GMV) during the same quarter. This marks a notable slowdown from the double-digit GMV growth reported in the previous quarter and contrasts with the growth figures from the same period last year, which were not specified. The overall trend indicates a cooling demand in the Chinese market, raising concerns among analysts and investors. Additionally, Nomura analysts highlighted that ByteDance's Douyin app, a significant player in the e-commerce space, is also facing challenges. An unnamed employee indicated that Douyin's e-commerce growth has slowed considerably, leading the company to potentially miss its ambitious target of 30% GMV growth for the year. In the wake of these reports, shares of Tencent saw a slight increase of over 1% on Friday, suggesting a mixed market reaction to the broader e-commerce landscape in China.