Chinese companies report boost in consumer spending due to AI-powered ads

In early May 2025, major Chinese companies Alibaba, Tencent, and JD.com announced their earnings for the first quarter, revealing positive trends in consumer spending within China. These reports indicated a year-on-year growth in sales for Alibaba's Taobao and Tmall of 9%, reaching 101.37 billion yuan (approximately $13.97 billion). JD.com also experienced significant growth, noting an impressive 17% increase in sales, surpassing initial projections. Furthermore, Tencent's revenue from its fintech and business services surged by 5%, signaling a healthy demand for consumer transaction services despite the ongoing economic pressure. The earnings reports come at a crucial time when China is navigating both internal economic challenges and external trade tensions. The data reflects performance from a period before the U.S.-China tensions escalated due to new tariffs exceeding 100% imposed on a variety of goods. Experts speculate that as these trade tensions begin to ease, consumer confidence and spending may further increase, potentially leading to a more positive economic outlook for the remainder of the year. AI technology has played a vital role in enhancing advertising strategies for these companies, improving efficiency and consumer targeting capabilities. Tencent reported a click-through rate on ads of nearly 3%, driven primarily by advancements in AI tools that optimize marketing efforts. Similarly, both JD.com and Alibaba adjusted their marketing revenues due to AI applications, with JD seeing a 15.7% increase while Alibaba's marketing revenue rose by 12% as it leveraged its AI tool, Quanzhantui, for better merchant marketing effectiveness. Despite these positive signs, analysts predict a potential slowdown, projecting only a 5.5% increase in retail sales for April, down from 5.9% growth in March amid lackluster domestic demand. The consumer price index saw declines for three consecutive months, reflecting ongoing economic concerns as China's real estate market struggles and geopolitical pressures restrict exports. As the government prioritizes boosting consumption amid these challenges, there remains cautious optimism for the future growth of major Chinese e-commerce and technology companies.