Chinese e-commerce giants face delicate balance between discounts, profit

Item 1 of 2 People ride on a scooter past a JD.com's advertisement promoting Singles Day shopping festival, in Beijing, China October 26, 2023. REUTERS/Tingshu Wang/File PhotoPeople ride on a scooter past a JD.com's advertisement promoting Singles Day shopping festival, in Beijing, China October 26, 2023.

This low-cost battleground presents a challenge for Alibaba's Tmall and JD.com. Both have traditionally sought to move up the consumer value chain by selling increasingly premium products, such as Appleskincare and Tiffany & Co jewellery, but are now forced to defend that space while also offering a wider array of cheap products to stem market share leakage.

Alibaba "cannot ignore PDD, but nor can it quell the competitive threat by wholly adopting PDD's strategy. JD.com is in a similar position," she said. For the March quarter this year, analysts expect overall revenue at Alibaba, 65% of which is generated by its domestic e-commerce arm, to grow 5.3% year-on-year while JD.com will rise by about 6%, according to LSEG data. That is roughly in line with growth trends in recent quarters.in the December quarter, though this figure includes its fast-growing international platform, Temu, as well as domestic platform Pinduoduo, which generates the vast majority of PDD's revenue.

Source: News Formal (newsformal.com)

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