Douyin ecommerce 618 growth was below target; cross-checks on the sector remain cautious, but Alibaba’s earnings leverage is still viewed positively
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Douyin ecommerce 618 growth was below target; cross-checks on the sector remain cautious, but Alibaba’s earnings leverage is still viewed positively
Nomura’s expert call suggests Douyin ecommerce is shifting from aggressive GMV expansion to balancing scale growth, revenue and profitability, and the weak 618 performance signals a cooling of China e-commerce demand, producing a divergent cross-check between Alibaba and JD.
- Douyin ecommerce’s 2026 618 GMV grew about 19% year-on-year, below the internal target of 24%-25%; the expert believes a more realistic FY26 GMV growth pace is about 15%-16%, below the 18%-19% initial-year target.
- Weak consumption, a high base, simplified promotion mechanics, and the tapering of replacement-for-old subsidies—especially in home appliances and consumer electronics—were the main reasons for the disappointing 618 performance.
- Douyin ecommerce’s 618 consumer subsidy was about RMB 3.5 billion, up from about RMB 2.6-2.7 billion last year, but the average discount rate was about 15%, down from about 17% last year, indicating that subsidy intensity remains relatively restrained.
- Douyin ecommerce’s 1Q26 return-refund rate was about 47%, with a settlement rate of about 53%; apparel, bags, and footwear accounted for about 38% of GMV, and together with live-streaming and short-video impulse buying behavior, this pushed the return rate higher.
- The Doubao and Douyin ecommerce partnership is still at an early stage, currently contributing about 2% of GMV, but is viewed as an important strategic initiative for next year, with focus on commodity understanding, data integration and supply-chain integration.
- The 20%-25% price increase on parts of Mac and iPad by Apple has limited direct impact on Douyin, but may trigger broader consumer-electronics brand repricing and be more unfavorable for platforms with higher exposure to electronics categories, such as JD.
Report interpretation
Overview
This report is a summary of a conference call by Nomura’s China internet team based on an expert call with a Douyin ecommerce operations manager. The core message is that Douyin ecommerce GMV growth during 618 in 2026 was about 19%, below the internal target of 24%-25%, and management focus is shifting from simply pursuing GMV growth to balancing scale, revenue and profitability. This shift is used to cross-check the macro pressure in China e-commerce as well as the Q2 and 2H26 earnings outlook for covered platforms like Alibaba and JD.com.
Core views
Nomura believes the overall China e-commerce industry is likely experiencing macro headwinds similar to those affecting Douyin ecommerce. For Alibaba, the report expects CMR on a June-quarter disclosed basis to be down 8% year-on-year, while comparable-currency CMR may be flat, both below previous market expectations; however, core commercial EBITA may still be in line and could rebound with a V-shaped recovery in 2H CY2026. For JD.com, Q2 guidance is cautious and the 618 promotion could bring some upside upside, but pressure in consumer electronics and home appliances is likely to rise in 2H, especially as Apple price hikes may push up industry costs and create brand pass-through. For Douyin, the report says the platform is unlikely to significantly increase subsidies just to protect GMV targets, and the strategy appears tilted toward stability and profitability.
Analysis framework
The report uses an expert-call cross-read approach, taking front-line operating observations from a Douyin ecommerce manager as inputs on industry demand, subsidy policy, return rates, AI commerce progress and instant-retail prioritization, then mapping these to investment implications for Alibaba, JD.com, Meituan and Apple.
Methodology notes
Use platform operating trends obtained via industry expert calls and extrapolate signals from one platform as cross-validation for the broader industry and peer companies.
The report uses Douyin ecommerce 618 GMV, subsidy intensity, return rate and category mix as reference points for reading China e-commerce demand, Alibaba CMR, JD retail revenue and consumer electronics pressure.
Sum-of-the-parts and multiples valuation
The disclosure table indicates that target prices for Alibaba, JD.com and Meituan are derived using sum-of-the-parts or P/E, P/S multiple frameworks, such as Alibaba China e-commerce, AliCloud and non-core asset SOTP valuation, JD Retail on FY26F P/E, and Meituan segments valued using different P/E or P/S multiples.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Alibaba Group Holding (BABA US)industry cross-check and covered name
- Strengths
- Core commercial EBITA may be supported by narrowing instant-retail losses, improved profitability in international e-commerce, and a slower pace of AI cash burn; Nomura expects merged EBITA to rebound 78% y-y in 2H CY2026.
- Weaknesses
- The CMR disclosed on June-quarter criteria is expected to decline 8% y-y, potentially below the previously expected 3%-5% drop.
- Comparison
- Compared with JD, Alibaba has lower exposure to concentration risk in consumer electronics categories, so the earnings-improvement case is more prominent.
- Risks
- Margin compression from heavier investment, payment and internet-finance regulatory risk, and potential value impairment linked to Ant Group.
- JD.com (JD US)industry cross-check and covered name
- Strengths
- Earlier Q2 guidance was cautious, and relatively strong 618 promotion results could provide some upside to revenue.
- Weaknesses
- JD Retail previously guided yoy revenue decline of 7%-8%; 2H pressure in consumer electronics and home appliances may rise.
- Comparison
- Compared with Alibaba, JD is more sensitive to electronics and appliance categories, so the impact of Apple price hikes on cost and demand pressure is larger.
- Risks
- Further macro deterioration and weaker-than-expected margin improvement at JD Retail or JD Logistics.
- Meituan (3690 HK)main mentioned name in disclosure table and relevant to instant-retail competition framework
- Strengths
- Has stronger instant retail and local fulfillment infrastructure compared with Douyin.
- Weaknesses
- Competition in food delivery and dine-in may still weigh on profitability.
- Comparison
- The expert believes Douyin is unlikely to significantly intensify instant-retail competition in the near term because it lacks local merchant networks, warehousing, logistics, fulfillment and local operations advantages.
- Risks
- Food delivery or dine-in competition could intensify, and new business performance may be weaker than expected.
- Douyin ecommercecore subject of expert call, not listed
- Strengths
- Has grown into a large-scale e-commerce business with traffic, short-video and live-commerce ecosystem; collaboration with Doubao’s AI shopping assistant has long-term strategic value.
- Weaknesses
- 618 GMV growth was below internal target, return rates are high, and non-standard categories have a large share, reducing subsidy efficiency as consumption weakens.
- Comparison
- Compared with traditional search-based e-commerce platforms, live-streaming and short-video commerce on Douyin more easily drives impulse purchases and therefore elevates return rates.
- Risks
- FY26 GMV target reduction risk, 2H consumption weakness, subsidy tapering, consumer-electronics price hikes, and slower-than-expected AI-commerce conversion.
- Apple (AAPL US)consumer electronics price signal, Not rated
- Strengths
- Brand price increases can reflect pricing power and cost pass-through capability.
- Weaknesses
- A 20%-25% increase on some Mac and iPad products may dampen demand.
- Comparison
- Direct impact on Douyin is limited because Apple’s official flagship store only entered Douyin last year; the impact is greater for platforms with higher consumer-electronics exposure such as JD.
- Risks
- If other brands follow with their own price hikes, 2H demand pressure in consumer electronics and home appliances may expand.
Key data
- Douyin ecommerce 618 GMV growthabout 19% y-yBelow the internal target of 24%-25%.
- Douyin ecommerce 1Q26 GMV growthabout 19.4% y-yClose to 618 growth, indicating a slowdown in first-half growth.
- Douyin ecommerce 2025 GMV growth29% y-yCreated a high base.
- Expert view on FY26 realistic GMV growth15%-16% y-yBelow the initial annual target of about 18%-19%.
- 618 consumer subsidy amountabout RMB 3.5 billionAbove about RMB 2.6-2.7 billion last year; amount is higher but subsidy intensity is lower.
- 618 average discount rateabout 15%Below about 17% last year.
- 1Q26 return-refund rateabout 47%Corresponding settlement rate is about 53%.
- GMV share of apparel, bags, and footwearabout 38%These categories have higher return rates.
- Doubao contribution to Douyin ecommerce GMVabout 2%Still early-stage but viewed as a key strategic initiative.
- Apple price increase on some Mac and iPad models20%-25%Limited direct impact on Douyin, but potentially greater pressure on consumer electronics and JD.
- Alibaba current price and ratingUSD96.14, BuyPrice date was 2026-07-02; disclosed target price is USD178.
- JD.com current price and ratingUSD26.62, BuyPrice date was 2026-07-02; disclosed target price is USD41.
- Meituan current price and ratingHKD71.60, BuyPrice date was 2026-07-03; disclosed target price is HKD109.
Impact & implications
Investment implications are mixed: at the industry level, weak 618 performance, subsidy tapering, and consumer-electronics price hikes suggest that China e-commerce demand recovery remains subdued; at Douyin, the strategy is shifting from GMV expansion toward better profitability and AI investment, which may reduce subsidy competition in the sector; for Alibaba, revenue guidance may be below market expectations, but narrowing losses, improving international e-commerce profitability and slower Qwen-related cash burn could support earnings resilience in 2H; for JD, there could be short-term upside from 618, but pressure in consumer electronics and home appliances appears more pronounced in 2H.
Risks
- China consumer demand has continued to weaken since late March, with both online retail and offline channels under simultaneous pressure.
- The 618 period in 2025 created a high base, and major platforms' promotion and subsidy intensity was high, making year-on-year growth harder this year.
- Tapering of replacement subsidies has reduced pre-paid demand in home appliances and consumer electronics after front-end demand was digested.
- After promotion mechanics were simplified, cross-selling and incremental GMV pull effects are weaker.
- Douyin ecommerce has high return-refund rates; non-standard categories and impulse-buying behaviors may continue to suppress settlement efficiency.
- Apple price increases may trigger local consumer-electronics brands to raise prices, suppressing 2H demand for consumer electronics and home appliances.
- AI shopping assistant and agentic commerce remain early-stage, with limited GMV contribution in the short term.
- Instant retail requires local supply, warehousing, logistics, fulfillment and subsidy capability; Douyin has no clear near-term edge here.
What to watch
- Whether Douyin ecommerce formally lowers its FY26 internal GMV target in July.
- Changes in China consumption, online retail and replacement-of-old-for-new subsidy policy in 2H26.
- Alibaba’s June-quarter disclosed-measure CMR and comparable-measure CMR performance, and whether core commercial EBITA meets expectations.
- Alibaba’s narrowing instant-retail losses, improvement in international e-commerce profitability, and the cash burn pace of Qwen.
- Whether JD Retail’s 2Q income comes in better than the cautious 7%-8% yoy decline guide, and 2H pressure in consumer-electronics demand.
- Whether domestic consumer-electronics brands adjust prices after Apple’s increases.
- Progress on Doubao’s commodity understanding, data integration, supply-chain integration with Douyin ecommerce, and GMV contribution.
- Whether Douyin maintains subsidy discipline or ramps investment again to chase GMV targets.