Shares of two of Chinas largest e-commerce firms fell on Thursday after Beijing regulators publicly criticized the way major online shopping platforms run large subsidy and promotional campaigns.
The Beijing Municipal Administration for Market Regulation summoned representatives from five platforms - Alibabas Taobao and Tmall, JD.com, Pinduoduo, Douyin and Xiaohongshu - as part of a broader push targeting what authorities described as "involution-style" competition, state broadcaster CCTV reported on Thursday.
Officials flagged a number of specific concerns about the promotions, including misleading advertising, inadequate disclosure of promotional rules, and failures to properly identify product sellers. The regulator instructed the platforms to rectify the identified issues.
On the market, Alibabas Hong Kong-listed shares fell about 6% to HK$106.80 by 05:52 GMT, a level the reporting said was the lowest for the stock since July 2025. JD.coms shares also declined roughly 6%, trading near HK$105.6.
Regulators singled out Alibabas widely publicized "10 billion yuan subsidy" campaign, saying it formed part of a longer-term marketing program rather than being a dedicated, time-limited subsidy for the annual "618" shopping festival. According to the report, the platform did not clearly disclose related rules and declined to provide details on subsidy spending and any cost-sharing arrangements with merchants.
JD.com faced similar criticism for its own "10 billion yuan subsidy" promotions. Authorities said information on campaign periods, subsidy amounts, and funding arrangements was not disclosed adequately, and they urged the platform to address those shortcomings.
Regulators warned that aggressive subsidy campaigns can distort pricing dynamics, squeeze merchant profits, and increase risks for consumers. As part of the response, the Beijing Municipal Administration for Market Regulation ordered the platforms to make corrections to the areas identified in the review.
The actions and the regulators findings come amid heightened scrutiny of promotional practices on major online marketplaces. The report confined its observations to the disclosures and structures of the advertisements and subsidy arrangements it reviewed; it did not provide further financial details or quantify subsidy spending across platforms in the report cited.
Sectors affected: E-commerce platforms, online retail, consumer-facing marketplaces; financial markets reflected immediate equity price impacts for listed platforms.