Shares of major Chinese technology companies came under pressure on Monday after new economic data pointed to a further slowdown in China’s recovery. Alibaba Group, JD.com, and Baidu all saw their U.S.-listed shares retreat as investors digested weaker-than-expected retail sales figures, raising fresh concerns about consumer demand in the world’s second-largest economy.
According to data released by China’s National Bureau of Statistics, retail sales grew by just 1.3% year-on-year in November. This marked a sharp slowdown from October’s 2.9% growth and represented the weakest pace of expansion since 2022. The data reinforced growing unease among investors about the durability of China’s post-pandemic recovery, particularly on the consumption side.
Chinese authorities have introduced several measures over the past year to encourage consumer spending, including a trade-in program for electronics and other household goods. While the initiative initially helped boost demand, economists now warn that its impact may be fading. Lynn Song, chief Greater China economist at ING Bank, noted in a research report that the trade-in scheme has shifted from being a boost to growth to a potential drag. According to Song, consumption was strongest when the program was first rolled out in late 2024, making recent year-on-year comparisons more challenging.
Song added that unless the policy is expanded to cover additional product categories or replaced with new measures to support household spending, consumption is likely to remain under pressure as the program is gradually phased out. These concerns weighed heavily on investor sentiment across Chinese internet stocks.
Alibaba’s American depositary receipts fell more than 3% in morning trading, sliding to around $150.86. JD.com shares declined by over 1% to roughly $29.08, while Baidu suffered a steeper drop of about 4%, falling to near $119.81. Despite Monday’s pullback, Alibaba has enjoyed a strong rebound this year, with its shares up roughly 84% year to date, although the stock remains well below its late-2020 peak. After hitting a four-year high in early October, Alibaba’s shares have struggled to maintain momentum.
Competition in China’s fast-growing quick-commerce segment has also weighed on profitability. Both Alibaba and JD have invested heavily in rapid delivery services for food and daily essentials, with aggressive discounting putting pressure on margins. JD’s heavier reliance on retail has contributed to its weaker performance, with the stock still down about 15% this year.
Baidu, meanwhile, has benefited from investor enthusiasm around artificial intelligence, with its shares up nearly 48% year to date. However, its core digital advertising business continues to struggle, with revenue declining year-on-year for the past two quarters. Together, the latest data and sector-specific challenges highlight the fragile state of China’s economic recovery and the risks facing its tech giants.