Alibaba and JD.com Shares Drop as Beijing Cracks Down on Misleading Discount Promotions

TLDR

• Chinese regulators summoned Alibaba, JD.com, Pinduoduo, Douyin, and Xiaohongshu over misleading promotional practices
• Both Alibaba and JD.com ran “10 billion yuan subsidy” campaigns that lacked clear disclosure
• Alibaba’s Hong Kong shares dropped 6% to HK$106.80, their lowest since July 2025
• JD.com shares also fell 6% to HK$105.6 in Hong Kong trading
• Regulators ordered all platforms to fix the issues, raising concerns about pricing and merchant impacts

China’s market regulator has taken action against some of the country’s biggest online shopping platforms over how they advertised subsidy campaigns during a major annual sales event.

The Beijing Municipal Administration for Market Regulation called in representatives from five platforms. Those were Alibaba’s Taobao and Tmall, JD.com, Pinduoduo, Douyin, and Xiaohongshu.

Alibaba Group Holding Limited, BABA

The move came ahead of the annual “618” shopping festival, one of China’s biggest e-commerce events. Authorities described the problem as “involution-style” competition — a term used in China to describe excessive, cutthroat rivalry.

Regulators said the platforms engaged in misleading advertising. They also cited failures to properly disclose promotional rules and identify product sellers.

Both Alibaba and JD.com ran campaigns called “10 billion yuan subsidies.” Regulators found these campaigns were not what they appeared to be.

For Alibaba, the regulator said the subsidy campaign was part of a longer-term marketing program, not a dedicated push for the 618 festival as implied. Alibaba also did not clearly disclose subsidy spending or how costs were shared with merchants.

JD.com faced similar findings. Authorities said the campaign periods, subsidy amounts, and funding arrangements were not made clear to consumers.

Stock Prices Take a Sharp Hit

The regulatory action hit both stocks hard on Thursday.

Alibaba’s Hong Kong-listed shares fell 6% to HK$106.80 by early morning GMT. That was the stock’s lowest level since July 2025.

JD.com shares dropped by the same amount, falling to HK$105.6. It was one of the weakest trading sessions for the stock in recent months.

U.S.-listed Alibaba shares also declined in early trading, falling around 4% intraday. JD.com’s U.S. listing fell close to 1%.

The regulator did not just flag the issues. It ordered all five platforms to correct their practices. Officials also warned that aggressive subsidy campaigns could distort pricing, hurt merchant profits, and create risks for consumers.

The crackdown is the latest example of Chinese authorities stepping in to regulate competition in the tech and e-commerce sector. Regulatory pressure has repeatedly influenced short-term investor sentiment and share prices in this space.

Both Alibaba and JD.com operate in a fiercely competitive market. Price-driven campaigns have become a key battleground, especially during events like 618 and the earlier “Double 11” festival.

It remains to be seen how the platforms will respond. No statement from Alibaba or JD.com had been issued at the time of publication. The regulator’s order to rectify the issues means further changes to promotional practices are likely ahead.

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