Just as Double 11 ended, the “big two” e-commerce platforms JD.com and Alibaba, owner of the Taobao and Tmall Group, released their financial results for the quarter ending on 30 September. This is the quarter which includes the two biggest shopping festivals: 618 and Double 11, and it shows how JD and Taobao and Tmall group adjusted their focuses ahead of Double 11.
An overview of the reports shows that JD.com exceeded expectations on all fronts by generating quarterly revenue of 260.4 billion RMB (35.94 billion USD), a 5.1% year-on-year (YoY) growth. Operating profit increased an impressive 29.5% YoY and reached 12 billion RMB (1.66 billion USD), with a profit margin of 4.6%, up from 3.8% in Q3 2023. JD’s largest business, the retail department earned 224.99 billion RMB (31.05 billion USD), up 6.1% YoY, surpassing the 1.5% increase rate in Q2, as well as 2023’s rates.
Meanwhile, results show that Alibaba continued to maintain its pace from the previous quarter as it recorded high investment but lower growth. Alibaba’s revenue was 236.50 billion RMB (32.65 billion USD) and had a 5% YoY growth. However, the adjusted EBITA was a 5% YoY decrease to 40.56 billion RMB (5.60 billion USD). The e-commerce-centric Taobao and Tmall Group reported revenue of 98.99 billion RMB (13.66 billion USD), a 1% YoY growth. Orders on the platforms grew in double digits between July and September, driving high online gross merchandise value (GMV). Meanwhile, the 88VIP membership saw double-digit growth to 46 million, up 5 million from Q2. Investment in online and offline marketing also grew significantly.
Many pundits saw this as the two platforms diversifying from e-commerce into Alibaba’s cross-border e-commerce and smart cloud services, as well as JD’s logistics and new businesses such as healthcare and industrial services, including platform services and advertising. JD’s refocus on supply chain and “white label” manufacturer brands, along with Taobao and Tmall’s focus on mid to high-end brands with the 88VIP membership means a reversal of positioning from the platforms. This is because JD used to be known as the platform which provided official name-brand merchants while Taobao used to be a lower-priced retailer marketplace. As both rivals commit to a new direction, how the Double 11 and potentially Double 12 play out will be interesting to analyse.
