2025-08-18 08:23Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the China Internet and eCommerce industry, focusing on online retail performance and key players in the market. Core Insights and Arguments 1. Online Retail Growth: - National online retail goods GMV accelerated to +8% year-over-year (yoy) in July, improving from +6% in May and June, which included the 618 shopping festival [2] - Online services GMV accelerated to +35% yoy in July, up from 29% in May and June, driven by a shift towards services and subsidies in food delivery and local services [2] 2. Retail Sales Performance: - Overall retail sales growth was 3.7% yoy in July, below expectations (Goldman Sachs estimate: +5.0% yoy) [2] - Notable slowdown in automobile sales, which declined by -1.5% yoy in July due to reduced discount rates amid "anti-involution" policies [2] 3. Parcel Volume Growth: - Industry parcel volume growth moderated to approximately +15% in July, with a steady growth rate in early August at low-teens yoy [2][21] - Average daily parcel volume was around 507 million in the first 10 days of August [21] 4. Company-Specific Insights: - Alibaba: Expected to report +11% yoy growth in Customer Management Revenue and 23% growth in cloud revenue, with a focus on AI initiatives [8] - Pinduoduo (PDD): Anticipated 14% growth in online marketing revenue and 7% in transaction commission revenue, with discussions around its evolving business model [8] - JD: Reported strong 20%+ revenue growth but faced wider-than-expected losses in new businesses, particularly in food delivery [9] - Meituan: Expected to see a decline in core local commerce EBIT due to increased competition and user subsidies [8] 5. Market Dynamics: - E-commerce engagement increased by 14% yoy in July, with JD and Taobao showing strong growth in time spent by users [7] - The competitive landscape is intensifying, particularly in food delivery, impacting profitability across platforms [7] 6. Future Outlook: - The industry is projected to maintain a 6% growth in online GMV by 2025, with parcel volume growth expected at 17% [2] - The potential peak in food delivery investment/losses is anticipated in the September 2025 quarter, which may lead to a positive inflection in eCommerce share prices in the second half of 2025 [7] Additional Important Content - Temu's Performance: - Temu's U.S. GMV decreased by 20% yoy in July, but its monthly active users (MAU) rebounded by 41% month-over-month (mom) after three months of decline [3] - The number of Temu merchants remained flat, indicating stability in merchant engagement [3] - Regulatory Concerns: - Temu has been notified of potential violations of the Digital Services Act for not adequately assessing risks related to illegal products sold on its platform [7] - Consumer Behavior Trends: - Consumer durables such as home appliances grew by +28.7% yoy, while discretionary categories like apparel showed modest growth of +1.8% yoy [23] - Investment Recommendations: - A defensive sub-sector exposure is recommended due to weaker profit setups for transaction platforms, with preferences for games, mobility, and internet verticals [7] This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the China eCommerce industry and its major players.