Alibaba, JD On Retail Radar As Analysts Flag Weak Singles’ Day Showing

Retail sales in the period rose 3% year over year, decelerating from a 4.5% growth last year, according to official data.

• Sales for Chinese e-commerce platforms rose 14% during China’s Singles’ Day, according to Syntun, although some analysts view that growth figure as soft.
• Retail sales in the period rose 3% year over year, decelerating from a 4.5% growth last year, according to official data. 
• BABA and JD stocks have declined in the last few days.

E-commerce sales during China’s Singles’ Day, an anti-Valentine’s shopping festival held annually on Nov. 11 and marked by major retail promotions, rose from last year, but not enough to ease concerns over the country’s sluggish consumer sentiment, according to analyst estimates and commentary.

That raises concerns for Alibaba Group and JD.com, two of the largest e-commerce firms, with the sentiment already trickling into their shares. 

BABA shares have declined for four straight sessions, while JD’s stock has dropped in four of the last five. On Thursday, JD’s stock in Hong Kong dropped 1.5%, while Alibaba’s local shares were flat.

Soft Singles’ Day Numbers?

Sales for Chinese e-commerce platforms rose 14% to about 1.70 trillion yuan ($238.30 billion) during this year’s Singles’ Day, according to data provider Syntun, as quoted in a report by the Wall Street Journal. 

That’s despite this year’s promotions, which typically begin in mid-October, running a week longer than usual, according to Nomura analysts Jialong Shi and Rachel Guo quoted in the WSJ report. They said that soft demand likely fueled more competition among retailers, pressuring margins industry-wide.

Official data showed that China’s retail sales, a key indicator of consumption, increased 3% year-over-year during this period, decelerating from a 4.5% growth rate last year.

Mixed Retail Sentiment

While some U.S. retailers reported stronger sales in China, overall consumer activity remains subdued amid ongoing weakness in the country’s property market and labor sector.

Alibaba and JD have not released official sales figures, instead sharing anecdotal data. JD said the gross merchandise value (GMV) on its platform hit a record, and the number of users placing orders increased by 40% during Singles’ Day. Alibaba has yet to provide details on the performance of its sites.

On Stocktwits, the sentiment for BABA was unchanged at ‘neutral,’ while that for JD shifted to ‘extremely bullish’ from ‘neutral’ the previous day.

To be sure, Alibaba’s shares have surged about 88% since the start of the year, driven largely by its aggressive AI investments and rapid rollout of AI applications. On the other hand, JD.com’s stock has fallen nearly 9% over the same period. BABA was trending on Stocktwits at number five as of early Thursday.

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