Alibaba and JD.com Battle for Hong Kong Shoppers, Stocks Slide After Stimulus Rally
Chinese e-commerce juggernaut Alibaba Group Holding (NYSE:BABA) and rival JD.com, Inc (NASDAQ:JD) are aggressively fighting for market share in Hong Kong.
The companies waived delivery fees for certain orders and boosted related services like local product returns in Hong Kong, SCMP reports.
The stocks are trading lower Thursday after a rally led by China’s stimulus plans.
Alibaba committed 1 billion yuan ($142 million) to boost its online retail platform Taobao’s offerings in Hong Kong. This is part of a campaign to ship orders above 99 yuan for free to one of the city’s more than 800 self-pickup stations.
JD.com earmarked 1.5 billion yuan to roll out new services in Hong Kong, including free door-to-door deliveries for specific orders above 299 yuan.
E-commerce consultant Jacob Cooke told SCMP that Hong Kong’s proximity and relatively low e-commerce penetration rate make it an attractive growth market.
Cooke also flagged the higher cost of operating in Hong Kong, which poses a challenge in efficiently scaling logistics.
Due to lackluster domestic demand, Alibaba and its rivals had already waged a price war in China in the e-commerce and cloud businesses.
Price Actions: At the last check on Thursday, BABA stock was down 4.27% at $110.33 in the premarket session. JD was down 4.87%.
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