CITIC Securities International: Q4 overall e-commerce GMV growth rate expected to exceed expectations.

China Merchants International released a research report that, according to data from iResearch, during the Double 11 period (October 14th to November 11th), the overall transaction volume (actual payment amount) of major e-commerce platforms (Taobao Tmall, JD.com, PDD, TikTok, Kuaishou) increased by 11.4% year-on-year. Although this growth rate was slightly lower than the 14.3% year-on-year increase in the first period (October 11th to November 3rd), and also weaker than the 13.6% year-on-year growth during this year's 618 (May 20th to June 18th), it was still better than the previously expected single-digit year-on-year growth. This may suggest that the overall e-commerce GMV growth in Q4 is expected to be better than the market's previously weaker expectations. Overall Industry Trends The weakening trend of competition in live e-commerce continues; platforms continue to strengthen core user experience, supply to meet demand for quality and price, and further focus on promoting a positive cycle between users and merchants; policies such as exchange-in-kind initiatives mildly stimulate consumption, assisting in the moderate recovery of demand. Despite the relatively mild consumer recovery sentiment, and the main comprehensive e-commerce platforms previously indicating an increase in investment in Q4 to exchange for more GMV growth, given the industry's overall focus on ROI, overall industry profitability performance may still be better than market expectations. Maintain buy ratings on Alibaba Group Holding Limited Sponsored ADR (09988), PDD Holdings Inc. Sponsored ADR Class A (PDD.US), and JD.com, Inc. Sponsored ADR Class A (09618). Continuation of the weakening trend of competition in live e-commerce According to data from iResearch, during the 2024 Double 11 period, TikTok/Kuaishou/PDD/Taobao Tmall/JD.com recorded GMV year-on-year growth of 18.8%/11.3%/15.8%/10.2%/7.0%, respectively. Compared to the industry's overall growth of 11.4%, TikTok/PDD continued to gain market share; compared to the year-on-year growth during this year's 618 period of 26.2%/16.1%/17.7%/12.0%/5.7%, the growth rates of TikTok/Kuaishou platforms further declined, while JD.com's growth rate showed signs of rebound after a high base effect. Overall, the growth rates of live e-commerce platforms continued to converge with industry trends. Taobao Tmall: The user-first strategy further achieves results, promoting a positive cycle between users and merchants During this year's Double 11 period, Taobao Tmall's core user base continued to expand, and the increase in consumer willingness drove brand merchants to achieve good performance. As of midnight on November 11th, the number of orders placed by 88VIP members increased by over 50% compared to the same period last year, and the number of 88VIP members during the Double 11 period maintained double-digit growth, with annual cooperation with 88VIP brands growing by over 300% year-on-year. During the Double 11 period, 589 brands on Tmall achieved sales exceeding one billion, a year-on-year increase of 46.5%, with 45 brands breaking the ten billion mark. In addition, Taobao Tmall continued to explore new territories to help merchants grow, and as of midnight on November 11th, orders for Taobao's "100 billion super subsidies" exceeded 150 million, with a 50% increase in the number of orders. JD.com: Continued penetration of the low-price mindset, seizing the demand for exchanging old for new appliances According to JD.com data, as of 23:59 on November 11th, the number of users shopping on JD.com during the Double 11 Shopping Festival increased by over 20% year-on-year, the volume of orders from live broadcasts increased by 3.8 times year-on-year, the sales of over 17,000 brands on the platform increased by over 5 times year-on-year, and the sales of over 30,000 small and medium-sized merchants on the platform increased by over 2 times year-on-year. In terms of implementing the initiative to exchange old for new appliances, over 90% of consumers in rural areas and counties nationwide exchanged old for new appliances through JD.com. Additionally, JD Logistics continued to expand its services such as "express delivery to rural areas" and "delivery, installation, removal, and receipt of large items," adding 300 remote towns and villages to its own delivery range nationwide. PDD: The low-price mindset remains solid, continuously expanding high-priced categories Starting from October 11th, PDD upgraded the "100 billion double subsidy" to "super double subsidy." As of October 18th, the cumulative number of orders reached 16.4 million, with fresh food categories accounting for 32% of the order volume, and sales of mobile digital categories accounting for over 40%, while sales of beauty, personal care, and mother and baby categories accounted for 28%.