The real competition between Alibaba, PDD Holdings, and JD.com is just beginning!

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As 2025 draws to a close, this year has witnessed fierce competition in the food delivery sector. Alibaba and JD.com have burned through tens of billions of dollars, hoping to revitalize their slowing e-commerce businesses via food delivery services. However, the result has been underwhelming revenue growth, with profits taking a significant hit. Meanwhile, PDD Holdings, which stayed out of the fray, has accumulated hundreds of billions in cash reserves, emerging as the 'richest' player in the e-commerce arena.

With the latest earnings reports from the three e-commerce giants $Alibaba(BABA.US)$ 、 $JD.com(JD.US)$ 、$PDD Holdings(PDD.US)$ now released, the real e-commerce showdown is just beginning. Today, we will conduct a detailed analysis of these three companies, starting with their fundamentals, examining signals from technicals, funding dynamics, and options trading, and finally exploring how to leverage options strategies to capitalize on potential opportunities.

1. The three companies have taken three different paths

In today’s e-commerce competition, the battle is no longer as simple as 'fighting for traffic.'$Alibaba(BABA.US)$ 、 $JD.com(JD.US)$ 、$PDD Holdings(PDD.US)$ After taking three completely different paths, their highlights and risk points have also diverged. If we were to describe them each with one word, Alibaba would be the game-changer, JD.com the boundary-expander, and PDD Holdings the deep-cultivator.

$Alibaba(BABA.US)$ Fighting on two fronts, Alibaba aims to prop up its traditional e-commerce business with food delivery while bolstering its cloud services to build competitive barriers. However, due to significant investments in food delivery and AI, which consumed a large portion of profits, Alibaba's latest quarterly net profit was 20.6 billion yuan, plummeting 53% year-over-year, with operating profit declining by 85% and free cash flow turning negative.

● Although Alibaba’s core e-commerce operations remain stable, they currently lack a growth engine. Customer Management Revenue (CMR) for core e-commerce grew by 10%, but this was mainly driven by increased commissions from merchants. The growth rate of GMV, which represents real transaction volume, remains sluggish at less than 5%, below the industry average. With competition from PDD Holdings and Douyin (whose e-commerce segment is growing by over 30%), Alibaba's market share could be rapidly eroded.

● It is not an exaggeration to call the food delivery business a cash-burner. In a single quarter, Alibaba lost 35 billion yuan on food delivery, averaging a loss of 4.75 yuan per order. While it did increase Taobao’s daily active users from 375 million to 437 million, the conversion rate of these subsidy-driven users into e-commerce customers was only 1%. In other words, out of 100 food delivery users, only one made purchases on Taobao. Losing 35 billion yuan on food delivery for just over 8 billion yuan in revenue growth makes this equation unsustainable.

● On the positive side, the food delivery business has indeed driven user growth and improved activity on the Taobao app. Taobao’s instant delivery service has shown several bright spots: optimized order structure, more high-value orders, reduced logistics costs, halved losses per order compared to before, and better-than-expected user retention and usage frequency. Management announced that investment in Taobao’s instant delivery will be significantly scaled back next quarter, suggesting that the worst may be over and that spending efficiency is improving. Whether future losses in food delivery can be offset by e-commerce remains to be seen.

● Cloud services have emerged as Alibaba’s second growth curve and represent its strongest “moat” at present. In the latest quarter, Alibaba Cloud generated revenue of 39.8 billion yuan, surging 34% year-over-year, surpassing already high market expectations. Profit margins remained stable at 9%, with AI-driven computing demand outstripping supply and a backlog of orders continuing to grow. Even after excluding intra-group cloud demand, the cloud business still achieved a robust growth rate of 29%, making it an exceptionally strong performance.

● The domestic AI narrative is just beginning, and the potential for future growth is highly promising. In this area, Alibaba leads the pack in terms of technical capabilities and business scale. It is actively expanding across infrastructure (chips and computing power), model layers (Qwen), and application layers (Quark, Lingguang, Qianwen). Recently, it announced its entry into the AI-to-C market, revamping the Tongyi App into Qianwen, positioning it as Alibaba’s most powerful official AI assistant and personal AI lifestyle gateway. Facing fierce competition, particularly from ByteDance’s DouBao (armed with key advantages in scenarios and traffic), Alibaba is creating new entry points through AI-to-C applications to solve issues like scenario limitations, traffic bottlenecks, and transaction loop closures—a challenging battle it cannot afford to lose.

$JD.com(JD.US)$ The core business remains resilient, but new ventures are like bottomless pits, burning through core profits and leading to an overall group loss of 1.05 billion yuan. It’s not that the company can’t make money—if it were to cut the loss-making new ventures, profits would rebound. However, JD.com is betting on the future.

● JD.com’s core retail operations remain highly profitable, with its strong merchandise sales capabilities still intact. JD Mall reported a profit of 13.9 billion yuan, representing a year-on-year increase of 28%. Revenue growth in daily necessities and apparel reached nearly 19%, which is four times the industry average.

● However, new ventures such as food delivery, Jingxi, and overseas acquisitions have resulted in a quarterly loss of 15.7 billion yuan for JD.com. For instance, acquiring physical retailers in Europe and purchasing Hong Kong supermarkets required significant upfront investments but have yet to show any profitability prospects. Logistics operations were also affected, with profits falling 1 billion yuan short of expectations, likely due to bearing some of the food delivery distribution costs.

● The future growth narrative heavily depends on JD.com's strategic decisions. If management decisively cuts unprofitable operations, there may be room for a stock price rebound; if they continue expanding aggressively, the stock price could further decline.

$PDD Holdings(PDD.US)$ PDD Holdings stands out as an anomaly in this year’s e-commerce landscape. By avoiding the food delivery war and instead focusing on subsidizing merchants and investing in agriculture, it became the only major player with positive net profit growth. However, PDD resembles a diligent middle-aged student—consistent but lacking surprises. Its earnings are being reinvested into addressing weaknesses (R&D + agriculture), making explosive short-term growth unlikely.

● PDD Holdings' profitability remains robust. In its latest quarterly results, revenue reached 108.3 billion yuan (a year-on-year increase of 9%), net profit was 29.3 billion yuan (a year-on-year rise of 17%), and cash reserves amounted to 423.8 billion yuan, surpassing Alibaba’s 373.6 billion yuan for the first time in history. Unlike others burning cash on food delivery, PDD allocated billions to merchant subsidies while minimizing supply chain costs.

● However, its decelerating growth signals underlying concerns. Revenue growth dropped from 44% last year to just 9%, marking two consecutive quarters of single-digit growth. The main platform’s Gross Merchandise Volume (GMV) slowed faster than expected, indicating entry into a phase of存量 competition. Additionally, Temu’s overseas operations face pressures from EU regulations and rising costs. Investments in initiatives like百亿减免and千亿扶持have yet to translate into clear commercial returns or a defined growth trajectory.

● For PDD Holdings, the next growth driver has not been identified, and market patience is waning. Management’s responses during earnings calls were unremarkable. Competitors touting AI-driven narratives are adding pressure. Following its earnings release, PDD Holdings’ market value plummeted by $13.4 billion in a single day. Although the company maintains substantial cash reserves and avoids reckless expansion, giving it room to maneuver over time, uncertainty about its prospects persists until a clear growth story can be articulated and demonstrated to the market.

For these three companies, their competition has evolved beyond mere traffic acquisition into a deeper contest of strategic resilience and ecosystem endurance. Alibaba aims to narrate a classic recovery tale featuring accelerated cloud growth and narrowing losses in instant commerce. JD.com faces the choice between continued diversification or refocusing on its core business. Meanwhile, PDD Holdings must determine whether Temu can establish a sustainable global model. All need to prove to the market that today’s massive investments will solidify tomorrow’s competitive moats—a challenging path indeed.

2. A brief analysis of the technical aspects, funding conditions, and option signals of the three companies

*The following data is sourced prior to the opening of the U.S. stock market on November 28.

Alibaba

$Alibaba(BABA.US)$ The stock price of Alibaba has fluctuated between $148.64 and $182.5 over the past month, with the current price near recent lows. Short-term moving averages indicate a bearish trend, but the 60-day moving average ($165.349) continues to provide long-term support. The MACD histogram below is narrowing, while the J value of the KDJ indicator has rebounded to 60.6, indicating signs of short-term oversold recovery. Overall, the short-term trend remains weak with oscillation. Key resistance levels to watch include the high of $166.37 on November 25 and the 20-day moving average at $161.562. Support levels are seen near the recent low of $148.64.

In terms of capital flow, the net outflow of major funds was $37.25 million on November 26, with cumulative net outflows exceeding $150 million over the past five days. However, a single-day net inflow of $46.74 million occurred on November 24, reflecting intensified capital competition. Institutional total holdings have slightly decreased compared to last month, though leading institutions such as Blackrock and JPMorgan have recently increased their positions.

In the options market, implied volatility (IV) at 39.97% is higher than historical volatility (HV) at 35.5%, suggesting expectations of increased short-term volatility. However, the current IV is at a relatively low historical percentile (25%). The Put/Call ratio has risen recently but remains below 1, indicating that market sentiment is still predominantly bullish, albeit with a mild increase in downside hedging demand, showing cautious optimism.

JD.com

$JD.com(JD.US)$ JD.com’s stock price has fluctuated between $28.21 and $30.15 recently. Short-term moving averages show a bearish alignment, with downward pressure on the trend. The BOLL channel has narrowed, suggesting unclear short-term direction. The 6-day RSI has recovered to 43.29, exiting the oversold zone but remaining below 50, while the MACD remains in negative territory, reflecting insufficient rebound momentum. The overall trend shows weak consolidation. Observers should monitor whether the stock finds support near the recent low of $28.21, while a trend reversal would require a break above the BOLL midline at $30.69.

In terms of capital flow, there has been a clear net outflow trend recently, with net outflows on 11 out of the past 12 trading days, totaling $360 million. On November 26, the short-selling ratio reached 24.18% (monthly average: 17.51%), but some institutional investors have increased their holdings. For instance, Blackrock added 3.34 million shares in Q3, reflecting growing market divergence.

In the options market, implied volatility (IV) at 36.83% exceeds historical volatility (HV) at 24.70%, but it is at a historically low level (5th percentile), suggesting that the market expects future volatility to exceed past levels. However, this expectation is already extremely subdued historically, potentially signaling an impending return of volatility. The Put/Call ratio has remained below 0.5 recently but has increased compared to September, indicating that overall market sentiment remains optimistic (with active Call trading), though downside hedging or bearish expectations are gradually increasing.

PDD Holdings

$PDD Holdings(PDD.US)$ PDD Holdings’ stock price has oscillated downward from over $130 to below $120 in the past month, with the 20-day moving average ($128.05) acting as resistance. The MACD histogram has expanded recently, indicating strengthening bearish momentum. The 6-day RSI has recovered to 27.38, exiting the oversold zone, but this suggests that short-term technical rebounds are unlikely to reverse the prevailing downtrend dominated by bears. The overall market structure remains weak. In the short term, bears dominate, with attention on whether the price breaks out of the $110–$120 range.

In terms of capital flow, the main funds have recorded net outflows over five of the last seven trading days. On November 20th, a single-day net outflow of $50.14 million occurred (the highest this month), accompanied by a reduction in institutional holdings. On November 26th, the short-selling ratio reached 15.52% (higher than the monthly average of 14.26%), reflecting increased bearish sentiment.

Regarding options, the implied volatility (IV at 30.47%) is lower than the historical volatility (HV at 24.70%) and remains at a historically low level (with IV percentile at 3%). This indicates that the market expects future price volatility to be calmer compared to the past, with expectations reaching an extreme level. The Put/Call volume ratio has recently risen (latest value at 1.5), and the Put/Call open interest ratio has also increased somewhat (but remains below 1). Additionally, overall options open interest has decreased, reflecting heightened short-term hedging activity. However, long-term funds have not aggressively built short positions, leaving the broader market still in a wait-and-see mode.

Overall, the three companies currently face different market challenges: Alibaba seeks stability amid strategic maneuvering, maintaining cautious optimism. JD.com awaits decisive direction amid divergent opinions, with a choice likely approaching soon. PDD Holdings must address pressure dominated by bearish sentiment.

3. What options strategies are currently suitable for each of the three companies?

For $Alibaba(BABA.US)$ This scenario—featuring potential fundamental catalysts, oversold technical conditions, and relatively inexpensive volatility—suggests adopting a bullish strategy with limited risk and limited reward (e.g., a Bull Call Spread). This approach avoids the high cost of directly purchasing Calls while balancing risks and costs amid possible recovery expectations.

● Suitable Scenario: Expecting Alibaba’s stock price to experience a mild rebound, but unlikely to surge significantly in the short term.

● Specific Actions: Buy one Call A and sell one Call B, where the strike price of Call A < strike price of Call B, and both have the same expiration date.

● Profit/Loss Dynamics: Selling the higher-strike Call effectively reduces premium costs, lowering the breakeven point due to reduced costs, making it easier to achieve profitability. The maximum risk of this strategy is the net premium paid when establishing the position. Detailed profit/loss scenarios (including breakeven points, maximum profits, and maximum losses) can be determined after selecting the expiration date, strike prices, and specific contracts, as shown upon scrolling down.

● Risk Management: Control position size, ensuring no single trade exceeds 10%-20% of total assets. Option prices fluctuate based on stock price movements, time decay, and changes in volatility as expiration approaches. It is crucial to set clear profit-taking and stop-loss targets and adhere to disciplined execution. For instance, if the option nears its maximum profit but retains substantial time value, consider taking profits. Conversely, if the stock price accelerates downward with no apparent rebound momentum, consider cutting losses. Specific profit-taking or stop-loss percentages may also be established.

For $JD.com(JD.US)$ In the current situation where volatility is compressed to an extreme and the direction is unclear, adopting a Long Straddle strategy by purchasing both a call and a put option allows investors to profit from an anticipated increase in volatility or a rebound in volatility without predicting market direction. This approach enables positioning at a strategic crossroads to capitalize on potential volatility or a breakout in volatility.

● Suitable scenario: Expecting JD.com's stock price to face a directional decision but uncertain about which direction it will take, while also anticipating that volatility will not be too low.

● Specific operation: Buy 1 Put + Buy 1 Call, with the strike prices and expiration dates of the Call and Put being identical.

● Profit and loss dynamics: As long as the stock price fluctuates sufficiently, profits from one side of the options can offset losses from the other side. When the stock price rises significantly, although the purchased Put may incur losses, the purchased Call generates profits, resulting in an overall positive return. Conversely, when the stock price falls sharply, although the purchased Call may result in a loss, the purchased Put generates profits, leading to an overall positive return. The maximum risk of this strategy is the net premium paid at the time of establishing the position. Detailed profit and loss scenarios at expiration can be observed after selecting the strategy, expiration date, strike price, and specific underlying asset.

● Risk management: As suggested above, it is essential to manage position sizing effectively, set appropriate profit-taking and stop-loss levels, and adhere strictly to discipline.

For $PDD Holdings(PDD.US)$ In a situation characterized by "declining stock prices + extremely low volatility + robust fundamentals," one can consider employing the Cash-secured Put strategy to generate steady income in undervalued zones or accumulate positions at lower levels.

● Suitable scenario: Believing that PDD Holdings has limited downside risk, its stock price is unlikely to fall significantly further, and you are willing to acquire PDD Holdings shares at a desired price if the stock declines.

● Specific operation: Sell 1 Put option while reserving sufficient cash to purchase 1 lot of shares if assigned.

● Profit and loss dynamics: If the stock price does not fall below the strike price by expiration, the premium collected from selling the Put becomes your profit, essentially earned without additional cost. However, if the stock price falls below the strike price and you are assigned, your effective purchase price will actually be lower than the strike price (after deducting the premium received from selling the Put). Detailed profit and loss scenarios at expiration—including breakeven points, maximum profit, and maximum loss—can be reviewed after selecting the expiration date, strike price, and specific underlying asset.

● Risk management: Proper position sizing and discipline remain essential. Additionally, for this strategy, it is crucial to note that significant stock price declines may lead to substantial paper losses. If you genuinely intend to take delivery of the shares, avoid blindly buying back options to stop losses, as doing so might incur higher costs. Clarifying your original motivation is critical. Furthermore, during significant declines, you may consider purchasing another Put with the same expiration but a different strike price as protection, converting the position into a Put Spread to lock in risks.

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