CMB International has maintained an "outperform" rating for China's internet industry. According to Analysys data, during the "Double 11" shopping period, from October 14 to November 11, major e-commerce platforms such as Taobao Tmall, JD.com (JD, Financial), Pinduoduo, Douyin, and Kuaishou saw a year-over-year transaction growth of 11.4%. Although this is a slight decrease from the 14.3% growth in the first cycle and lower than the 13.6% growth during the 618 festival, it still exceeds earlier expectations of single-digit growth. This suggests that fourth-quarter gross merchandise volume (GMV) growth may surpass previous market forecasts.
Industry trends observed include continued weakening of competition in live-streaming e-commerce, platforms strengthening core user experiences and focusing on positive feedback loops between users and merchants, and moderate effectiveness of consumption-boosting policies like trade-in programs. Despite a subdued consumer recovery sentiment and potential increased investment by major platforms for GMV growth in Q4, the industry's focus on return on investment (ROI) could lead to better-than-expected profit performance.
CMB International continues to recommend a "buy" rating for Alibaba (BABA), Pinduoduo, and JD.com.
