A slowdown in China's retail sales to 3.0% year-over-year growth in November has triggered sharp declines in tech stocks, with Alibaba, JD.com, and Baidu all posting significant losses. The data signals weakening domestic consumer demand and raises concerns about economic momentum.
- China's November retail sales rose 3.0% year-on-year, the slowest pace since early 2024.
- Alibaba (BABA) dropped 6.8%, JD.com (JD) fell 5.4%, and Baidu (BIDU) declined 4.9% post-data release.
- Online retail sales grew at 6.4%, but offline sales expanded by only 1.8%.
- The slowdown reflects persistent weakness in domestic consumer demand despite government stimulus.
- Investors are revising earnings expectations for consumer tech and e-commerce firms.
- Market sentiment toward China's economic rebound has weakened amid mixed economic signals.
Shares of major Chinese tech firms plunged on Monday following the release of November's retail sales data, which showed a year-on-year increase of just 3.0%—well below expectations and the previous month’s figure of 5.5%. The deceleration marks the slowest pace in over a year and underscores persistent challenges in reviving consumer spending amid economic headwinds. The weak retail performance directly impacts e-commerce platforms reliant on consumer activity. Alibaba Group, JD.com, and Baidu, which operate key online marketplaces and digital services, all experienced steep intraday drops, with Alibaba (BABA) down 6.8%, JD.com (JD) shedding 5.4%, and Baidu (BIDU) falling 4.9%. Analysts attribute the sell-off to growing worries over sustained low consumer confidence and reduced online transaction volumes. The data also reveals a broader structural shift: underlying consumer demand remains fragile despite government stimulus measures. While online retail sales grew at a 6.4% pace—outpacing overall retail—this growth is increasingly reliant on discounting and promotional activity rather than organic demand. Meanwhile, offline retail sales expanded by only 1.8%, signaling subdued foot traffic and spending in physical stores. The market reaction extends beyond the tech sector, affecting broader investor sentiment toward China’s economic recovery. Foreign and domestic investors are now reassessing near-term earnings forecasts for consumer-facing firms, with many questioning whether recent improvements in industrial output and exports can offset sluggish consumption.