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LB Select
2023.09.18 06:30
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E-commerce Industry Differentiation: Pinduoduo Takes the Lead, Alibaba and JD.com Catching Up?

Maintain industry preferences: Pinduoduo (Buy) > Alibaba (Buy) > JD.com (Neutral).

This article is sourced from Gu Xinyu, Sun Mengqi, and Zhao Li from China International Capital Corporation Limited.

In August, the year-on-year growth of physical e-commerce online retail sales reached 6.1% (compared to a 14% increase in the second quarter/July and a 5% increase in May), and it is expected that the consumption market will maintain steady growth in the third quarter.

China International Capital Corporation Limited predicts the GMV growth rate for 2023: e-commerce industry (+11%)/Alibaba Group (+4%)/JD.com (+6%)/Pinduoduo (+29%)/Kuaishou (+32%)/Douyin (+43%).

Alibaba and JD.com are relatively weak, while Pinduoduo takes the lead

  1. It is expected that Alibaba's e-commerce GMV growth rate will be in the low single digits. With the combination of user engagement, pricing power, and content strategy, the growth rate of revenue is expected to be faster than that of GMV.

  2. The impact of JD.com's adjustment in the self-operated category is weakening due to the base effect, but a more significant recovery in the industry still needs to be observed in order to achieve double-digit growth.

  3. Pinduoduo's GMV growth rate (+24%) is expected to continue outperforming the industry. After being fully promoted for one year, the growth rate of revenue in the second half of the year will slow down, but this has already been reflected in market expectations. The brand upgrade strategy will continue to support the improvement of monetization rate.

Investment Recommendations

It is expected that the release of new mobile phones in September will drive the industry's steady recovery.

Alibaba and JD.com, as shelf e-commerce platforms, continue to pursue user engagement and pricing power strategies to seek incremental growth, while Pinduoduo's user loyalty remains solid. Live-streaming e-commerce platforms are advancing the layout of a wide range of shelves.

Maintain industry preferences: Pinduoduo (Buy) > Alibaba Group (Buy) > JD.com (Neutral).

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