Shenwan Hongyuan Group Co., Ltd. released a research report stating that while e-commerce platforms saw a slowdown in their core business growth during the fourth quarter of 2025 due to high base periods and competitive pressures, macroeconomic data from the start of 2026 confirms the ongoing resilience of online consumption, with a positive outlook for the full year. The competitive landscape in the instant retail sector is stabilizing, with subsidies becoming more rational and targeted, leading to a clearer path for Unit Economics (UE) improvement. This is expected to drive profit recovery for related platforms beyond expectations. Competition continues on the AI application front, but rapid demand-side growth is creating accelerated growth opportunities for companies like Alibaba. It is recommended to maintain focus on the synergy and practical implementation of "AI + consumption."
Key views from Shenwan Hongyuan are as follows:
Online consumption is showing signs of a bottoming-out reversal, with marginal improvements in the growth rates of merchandise retail and catering. The core business growth of platforms remains resilient. According to the National Bureau of Statistics, total retail sales of consumer goods from January to February 2026 reached 8.61 trillion yuan, a year-on-year increase of 2.8%. National online retail sales amounted to 3.25 trillion yuan, up 9.2% year-on-year. Online sales of physical goods increased by 10.3% year-on-year to 2.08 trillion yuan, with the penetration rate rising by 1.93 percentage points year-on-year to 24.2%. Parcel delivery volume grew by 7.1% year-on-year, about 3.2 percentage points lower than the growth rate of online physical goods sales, while intra-city business turned negative year-on-year. This reflects continued resilience in online consumer demand, although its marginal contribution to driving parcel delivery growth has weakened.
Influenced by high base effects from trade-in programs, core business growth rates across platforms continued to diverge. Alibaba's Customer Management Revenue (CMR) and local commerce segments faced pressure, while Pinduoduo's transaction service revenue maintained relatively rapid growth. Overall, platform core businesses were pressured in Q4 2025 by high base effects and intensified competition, but a bottoming-out reversal is anticipated in the future.
Upward demand in the AI industry is accelerating commercial monetization, and consumption enthusiasm continued during the Spring Festival promotional period. Competition among major internet companies has shifted towards scenario penetration, ecosystem synergy, and commercialization. During the Spring Festival and the March 8th promotions, platforms continued to employ simplified strategies like instant discounts, direct price cuts, and subsidy coupons, sustaining consumer activity. Taotian, JD.com, and Douyin achieved steady growth in their respective dominant categories and scenarios.
Concurrently, competition in the AI industry is gradually shifting from model capability competition to application implementation. Leading companies are increasing investments to drive product iteration and upgrades. Alibaba established the ATH business group and accelerated the integration of resources like Tongyi, Bailian, Qianwen, and Wukong. ByteDance successively released models like Seed 2.0 and Doubao 2.0. Tencent's Hunyuan and Yuanbao are accelerating penetration into high-frequency scenarios. Meituan is deepening the implementation in local life services around models like LongCat, "Xiao Tuan," and "Xiao Mei." Catalyzed by concentrated Spring Festival subsidies and marketing activities, user bases for leading AI applications like Qianwen, Doubao, and Yuanbao expanded rapidly. The AI business is transitioning from the technology investment phase to the stages of user reach and value realization.
The competitive landscape in the instant retail industry is stabilizing, with subsidy intensity narrowing marginally. Platform strategies are shifting towards efficiency optimization. In Q4 2025, daily order volumes for Taobao's Flash Shopping and Meituan stabilized around 70-80 million orders, while JD.com's on-demand delivery maintained around 10 million orders, indicating industry stabilization. With the arrival of the off-season and platform strategy adjustments, industry subsidy levels have significantly decreased from the peak in the summer of 2025. Both Alibaba and JD.com have indicated they will reduce investments in instant retail businesses after 2026. The competitive logic is shifting from extensive subsidies to refined operations and UE repair. Platforms are increasingly relying on supply innovation, membership synergy, and fulfillment efficiency improvements to drive retention and conversion.
Furthermore, since late 2025, the State Administration for Market Regulation has successively issued relevant standards and regulations, upgrading the regulatory focus from countering internal competition to emphasizing "strong compliance, responsibility, and safeguarding people's livelihoods." Issues such as irrational subsidies, algorithm-driven order suppression, and food safety failures will face stricter constraints, which is expected to lead to ongoing optimization of the industry's competitive landscape.
Cloud services continue to accelerate revenue growth, but profit trends are diverging in the short term due to platform strategies and spending rhythms, with expectations for upward recovery elasticity remaining strong in 2026. According to company announcements: 1) On the revenue side: Core business growth faced pressure, while cloud services continued to accelerate sequentially. Taotian's Q4 2025 CMR was slightly below expectations, mainly due to the high base effect from a 0.6% technical service fee and stable penetration increases for site-wide promotions. However, cloud service growth accelerated to 36%, confirming the effectiveness of the company's capital investments and application-side layout in the AI field. 2) On the profit side: Alibaba's cloud business profit margin remained stable. E-commerce profits were impacted by Flash Shopping expenditures but showed a clear trend of sequential improvement. JD.com's core retail profit margin remained stable, and coupled with restrained spending on new businesses, is expected to achieve continued profit recovery. Pinduoduo's operating expenses increased significantly due to its billion-yuan subsidy program, but overseas revenue and profit margins improved beyond expectations, supporting resilient overall profitability.
Risk warnings include weaker-than-expected consumer spending, intensifying industry competition, slower-than-expected development of new businesses, and subsidy investments exceeding expectations.