According to the National Bureau of Statistics, the online retail sales and physical commodity online retail sales in the first five months reached RMB 5.8 trillion and RMB 4.8 trillion (similarly), a year-on-year increase of 12.4% and 11.5%, corresponding to a compounded average growth rate of 13.1% and 11.6% over two years. The online retail sales growth rate continued to exceed the growth of physical commodity online retail sales.

According to the report, the growth rate of physical commodity online sales in May alone was 12.9%, which further accelerated on a monthly basis. The trend of steady growth under higher base is better than market expectations, and the continuous penetration of live streaming e-commerce and instant retail, and the improvement of shopping experience contribute to the continued shift of consumer buying habits towards online.

The bank believes that investment in e-commerce platforms that focus on high-frequency and core members to subsidize and drive user experience enhancement is expected to support efficient growth. Based on a relatively stable profit level, it is expected to provide support for shareholder returns and possibly valuation levels. Future consumption recovery may support further valuation re-evaluation. The bank maintains 'buy' ratings for Pinduoduo (PDD.US), Alibaba (BABA.US) (09988.HK) and JD.com (JD.US) (09618.HK).