China e-commerce March growth weakened, but 1Q26 remained generally resilient

Overview

This report tracks Chinese e-commerce industry online sales performance in March and 1Q26. The core conclusion is that March online retail and online physical goods GMV slowed noticeably versus the first two months of 2026, but 1Q26 overall performance improved versus 4Q25, and the industry backdrop did not clearly decelerate. J.P. Morgan believes that the longer Spring Festival holiday pulled demand forward ahead of time, so March weakness should not be mechanically extrapolated into a full-year trend.

Core views

Core views in the report include: first, 1Q26 online retail grew 8.0% year-over-year and remained robust, potentially creating upside risk to platform GMV; second, uncertainty on the revenue side is higher than on the GMV side because competition is driving platform de-monetization, so GMV growth may not fully translate into revenue growth; third, e-commerce industry growth in April is expected to improve versus March, but may remain below total 1Q26 growth; fourth, there is clear category divergence, with communication devices remaining strong, home appliances pressured by high base effects, and apparel, food, and daily-use goods all showing varying degrees of deceleration in online growth.

Analysis framework

The report is mainly based on National Bureau of Statistics online retail, online physical goods sales, total retail sales, online penetration and category-level online sales data, comparing year-on-year growth changes for 1Q26, March, the first two months of 2026, and 4Q25, and combining the Spring Festival holiday, last year's comparable base, and category demand pull-forward to explain short-term fluctuations.

Methodology notes

• industry_trackingNBS online retail sales tracking

  Use National Bureau of Statistics online retail data to track e-commerce industry sentiment

  Use online retail, online physical goods GMV, total retail sales, and online penetration to gauge demand strength and the potential direction of platform GMV.

• growth_analysisYoY growth comparison

  Year-over-year growth comparison

  Compare year-over-year growth for 1Q26, March, the first two months of 2026 and 4Q25 to identify differences between demand pull-forward, monthly slowdown, and quarterly recovery.

• segment_analysiscategory sales breakdown

  Online sales by category breakdown

  Assess potential impacts by platform and category exposure through performance in home appliances, communication devices, apparel, food, and daily-use products.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China e-commerce industry

  Research focus

  Strengths

  1Q26 online retail and online physical goods GMV growth both improved versus 4Q25, and online penetration continued to rise.

  Weaknesses

  Single-month growth in March slowed markedly versus the first two months of 2026, showing weaker demand after the Spring Festival.

  Comparison

  1Q26 performed better than 4Q25, but March was weaker than the first two months of 2026.

  Risks

  If April fails to rebound, the market may trim expectations for e-commerce GMV and revenue growth.

• JD.com, Inc. (JD; 9618.HK)

  Within coverage, an e-commerce company with relatively large exposure to home appliance and communication devices categories

  Strengths

  Communication devices rose 27% year-over-year in March and 21% in 1Q26, supporting revenue expectations.

  Weaknesses

  Home appliances were down 5% year-over-year in March, potentially dragging category performance.

  Comparison

  The report views the combined home appliance and communication devices performance as indicating limited downside risk to JD's 1Q revenue growth versus expectations.

  Risks

  High bases, category mix shifts, and competitive subsidies may affect the conversion to revenue and profit.

• PDD HOLDINGS INC (PDD)

  A China e-commerce platform within coverage

  Strengths

  Industry GMV resilience could support platform transaction performance.

  Weaknesses

  The report does not provide company-level revenue, profit, or rating updates.

  Comparison

  Compared with the sector overall, company impact depends on platform category mix and monetization strategy.

  Risks

  Intensifying competition and de-monetization may prevent GMV growth from fully translating into revenue.

• Vipshop (VIPS)

  Within coverage and more closely linked to apparel online sales exposure

  Strengths

  1Q26 apparel online sales still rose 12% year-over-year.

  Weaknesses

  J.P. Morgan estimates that March apparel online sales fell about 1% year-over-year on a single-month basis, indicating clear post-pull-forward weakness after springwear demand timing.

  Comparison

  The apparel category is weaker than communication devices and food.

  Risks

  If apparel demand remains soft, it could pressure growth expectations for relevant vertical platforms.

Key data

• 1Q26 online retailRMB 4.977 trillion, up 8.0% year-over-yearGrowth outpaced 4Q25's 5.8%.
• March online retail year-over-year growth5.8%Below 9.2% in the first two months of 2026.
• 1Q26 online physical goods GMVRMB 3.161 trillion, up 17.5% year-over-yearSignificantly faster than 2.3% in 4Q25.
• March online physical goods GMV year-over-year growth2.5%Clearly slower than 10.3% in the first two months of 2026.
• 1Q26 total retail sales year-over-year growth2.4%Above 0.7% in 4Q25.
• 1Q26 online penetration in physical goods24.8%Up 0.8 percentage points year-over-year.
• March home appliances sales year-over-year growth-5%Below 3% growth in the first two months of 2026, mainly due to an above-35% high base in March 2025.
• March communication devices sales year-over-year growth27%Higher than 18% in the first two months of 2026, despite a relatively high comparable base last year.
• 1Q26 apparel online sales year-over-year growth12%Below 18% in the first two months of 2026; J.P. Morgan estimates March month-on-month year-over-year was down about 1%.
• 1Q26 food online sales year-over-year growth17%Below 21% in the first two months of 2026; J.P. Morgan estimates March month-on-month growth at about 10%.
• 1Q26 daily-use products online sales year-over-year growth4%J.P. Morgan estimates March month-on-month growth at low single digits.

Impact & implications

From an investment perspective, 1Q26 sector GMV resilience is generally constructive for China-focused e-commerce platforms, especially as it may ease concerns around first-quarter turnover, but revenue and profit leverage should still be viewed cautiously because competition, subsidies, and de-monetization could weaken the conversion of GMV into revenue. By segment, strong communication devices are positive for related platform and supply-chain exposures, while deceleration in home appliances and apparel highlights risks of high bases and demand pull-forward.

Risks

• The March single-month weakness could persist into subsequent months, leading the market to downgrade e-commerce industry growth expectations.
• Platform competition and de-monetization may prevent GMV growth from fully translating into revenue growth.
• Demand pulled forward by the Spring Festival may distort quarter-versus-month trend interpretation.
• Categories such as home appliances and apparel may be vulnerable to high-base or seasonal effects, resulting in large short-term growth swings.
• The report’s data is mainly based on macro and category-level statistics and does not provide complete company-level financial forecasts directly.

What to watch

• Whether e-commerce industry growth in April improves from March.
• Whether 1Q26 e-commerce company GMV benefits from the sector's 8% online retail growth.
• The conversion rate of GMV growth into revenue growth, especially under competition and de-monetization.
• Whether strong growth in communication devices can be sustained.
• Subsequent divergence in online sales of home appliances, apparel, food, and daily-use products.
• Whether online penetration in physical goods continues to rise.