A Side-By-Side Comparison of JD and Alibaba’s Revenue—Who’s Leading?

Alibaba has dominated the Chinese e-commerce space for years, though JD.com claims it's China’s largest online retailer and “the country’s biggest internet company by revenue.” Which company is a better investment?

Both Alibaba and JD.com sell items such as apparel, electronics, and cosmetics at wholesale prices when purchased in bulk.

JD.com recently released its results for 2021's third quarter, revealing its net revenue and income from operations. According to the report, JD.com saw net revenue of $33.9 billion, reflecting a 25.5 percent increase YoY (year-over-year). JD.com says its total net revenue for 2020 was $114.3 billion, and that it had more than 550 million active users.

For the quarter ended Sept. 30, 2021, Alibaba reported revenue of 200,690 million Chinese renminbi (approximately $31.2 billion), representing a 29 percent YoY increase. According to CFO Maggie Wu, a large percentage of growth was “driven by the performance of [the company’s] diversified businesses.”

In terms of users, Alibaba reported that it had 1.24 billion active users in the 12 months ended Sept. 30, 2021, reflecting an increase of 62 million users from the 12 months ended June 20, 2021. Though Alibaba is leading by number of users, JD.com is certainly the higher earner.

Morningstar senior analyst Chelsey Tam says her team is giving preference to JD.com over Alibaba, “as there is more clarity on the long-term margin improvement at JD versus the level of margin decline for the next five years at Alibaba.” Tam suggested that JD “is less aggressive than Alibaba in investing in less developed areas and serves a smaller user base that prioritizes quality over low prices.”

Morningstar assigned a price target of 182 Hong Kong dollars per share to Alibaba and 438 Hong Kong dollars to JD.com.

Stock performance is something investors can use to assess risk and the potential for returns on their investment. Alibaba stock currently trades on the NYSE under the ticker symbol “BABA”. As of Nov. 23, 2021 shares were selling for $133.66, and the company had a market cap of $363.31 billion.

JD.com, which trades on the Nasdaq under the ticker symbol “JD”, was selling shares for $89.46 as of Nov. 23, 2021. The company had a market cap of $147.18 billion.

Companies experience ups and downs, and it's important to know what these are before investing. On April 10, 2021, Reuters reported Alibaba was fined $2.75 billion after “an anti-monopoly probe found the e-commerce giant had abused its dominant market position for several years.”

According to the State Administration for Market Regulation, Alibaba had abused market dominance since 2014 by “preventing its merchants from using other online e-commerce platforms.” Then, on Nov. 19, 2021, CNBC reported that China would be fining both Alibaba and JD.com for “failing to declare 43 deals that date as far back as 2012 to authorities.”

For violating China’s 2008 anti-monopoly law, each of the companies involved in the case are expected to receive a fine of 500,000 Chinese yuan, which is equivalent to $78,000.