JPMorgan has released a research report maintaining an optimistic outlook on two major Chinese e-commerce players, assigning price targets of $210 for Alibaba's US-listed shares (BABA.US) and HK$205 for its Hong Kong-listed shares (09988), both carrying an "Overweight" rating. Similarly, the bank has set price targets of $38 for JD.com's US-listed shares (JD.US) and HK$148 for its Hong Kong-listed shares (09618), also with an "Overweight" rating.

According to the report, the three growth engines that have driven China's e-commerce platforms over the past 15 years—market share competition, shopping festival-driven demand concentration, and subsidies (initially funded by platforms and later by the state)—are simultaneously weakening during the period from April 2025 to June 2026. The bank notes that the rate of market share loss for traditional platforms has slowed to approximately 1 percentage point per year, down from 3 to 5 percentage points between 2021 and 2023. Additionally, GMV growth for e-commerce platforms during the 618 shopping festival has decelerated to around 1%, even after the event was extended to 37 days. The newly implemented Pricing Behavior Rules have restricted platforms' ability to offer subsidies and festival-specific promotional tools, while the national trade-in program has also been scaled back and redesigned.

While the market perceives these developments as a growth problem, JPMorgan views them as signaling a structural shift in industry profit margins. At this stage of penetration maturity, subsidies largely serve to transfer demand between platforms, creating a dilemma for the industry: all platforms benefit from reduced spending, yet no single platform can unilaterally cut back without risking market share loss. The bank believes that regulation now provides an external enforcement mechanism that platforms themselves cannot create, pushing competition toward monetization, service quality, and supply chain efficiency.

In terms of stock impact, JPMorgan's top picks are Alibaba and JD.com. The bank argues that Alibaba has the clearest path to converting lower competitive spending and traffic generated through its quick commerce initiatives into higher-margin customer management revenue (CMR). JD.com, meanwhile, should benefit from reduced destructive self-operated discounting and the renewed recognition of its logistics and service moat, although challenging year-over-year comparisons related to government subsidies are likely to obscure improvements in the second quarter and part of the second half of 2026.

Vipshop (VIPS.US), with its discount flash-sale model, is less dependent on China's 618 and Double 11 shopping festivals compared to larger platforms, meaning its 2026 year-over-year comparisons will more accurately reflect its own operational fundamentals rather than government support. JPMorgan expresses a preference for both Alibaba and JD.com as established leaders, believing that the market perceives them as the most vulnerable to disruption, when in fact their positions are more resilient than expected.

The report highlights that June 2026 will mark the first 618 shopping festival fully governed by the new Pricing Behavior Rules, featuring an extended event period, no disclosure of overall GMV figures, and simplified mechanisms—while comparable platform GMV is expected to grow only about 1%. Competition in the quick commerce sector, valued at RMB 180 billion to RMB 200 billion, has shifted from a cash-burning phase to one focused on assessing profit and loss impacts. Beginning with the September 2026 earnings season, which will reflect clean quarters after subsidies, the bank expects to test whether the traffic acquired can be retained, monetized, and ultimately converted into improved profit margins.