JPMorgan has released a research report maintaining an "Overweight" rating on Alibaba, with target prices set at $210 for its US-listed shares (BABA.US) and HK$205 for its Hong Kong-listed shares (09988). The bank also rates JD.com as "Overweight," assigning target prices of $38 for its US shares (JD.US) and HK$148 for its Hong Kong-listed shares (09618).
Over the past 15 years, China's e-commerce platforms have been driven by three key growth engines: market share competition, demand concentration during shopping festivals, and subsidies initially funded by platforms and later by the government. According to JPMorgan, all three of these engines are expected to weaken simultaneously between April 2025 and June 2026.
The bank notes that the pace of market share loss at traditional platforms has decelerated to roughly 1 percentage point annually, down significantly from the 3 to 5 percentage points recorded between 2021 and 2023. During the 618 shopping festival, gross merchandise value growth across e-commerce platforms has fallen to approximately 1%, even as the promotional period was extended to 37 days. Additionally, the new Pricing Behavior Rules have restricted platforms' ability to offer subsidies and festival promotions, while the national trade-in program has been scaled back and redesigned.
While the market perceives these developments as growth-related challenges, JPMorgan sees a structural transformation in industry profit margins. At this stage of market penetration maturity, subsidies largely serve to shift demand between platforms, creating a dilemma: all players would benefit from reduced spending, yet no individual platform can unilaterally cut back without risking market share erosion. The bank believes that regulatory measures now provide an external enforcement mechanism that platforms themselves could not create independently, redirecting competition toward monetization, service quality, and supply chain efficiency.
Regarding stock implications, JPMorgan's top picks are Alibaba and JD.com. The bank sees the clearest path for Alibaba to convert lower competitive spending and traffic gains from quick commerce into higher-margin customer management revenue. JD.com, meanwhile, should benefit from less disruptive first-party discount reductions and a renewed appreciation of its logistics and service moat, although challenging year-over-year comparisons related to government subsidies may mask improvements in the second quarter of 2026 and parts of the second half.
Vipshop's flash-sale model is less dependent on China's 618 and Double 11 shopping festivals compared to larger platforms, which means its 2026 comparisons will more accurately reflect its own operational fundamentals rather than government support. JPMorgan favors the two established leaders, Alibaba and JD.com, believing the market views them as the most exposed to potential disruption.
The bank points out that June 2026 will mark the first 618 shopping festival fully governed by the new Pricing Behavior Rules, featuring extended promotional periods, discontinuation of overall GMV disclosure, simplified mechanisms, and comparable platform GMV growth of only about 1%. The quick commerce competition, valued at RMB 180 billion to RMB 200 billion, has shifted from a cash-burning phase to evaluating profit-and-loss impacts. Starting with the September 2026 earnings season, when clean quarters are expected to emerge, the bank anticipates testing whether acquired traffic can be retained, monetized, and converted into improved profit margins.