Competition that hit Alibaba down

Alibaba appears to be facing increasingly stiff competition from rival JD.com, which like Alibaba has worked to boost sales from foreign retail companies in China. While Alibaba has talked in recent months of the potential of reaching consumers in rural China, JD.com has focused on reaching the more affluent shoppers in urban areas.

While it’s true that e-commerce is increasingly important in more remote areas of China, income there remains low, as does spending, and China’s recent economic turmoil is likely slowing down growth.

In addition to its focus in more rural areas, Alibaba continues to face problems over sales of counterfeit items, more so than JD.com, an issue of increasing important not just to retailers abroad and the U.S. government, but also to wealthier Chinese shoppers.

And JD.com enjoys a positive, Amazon-like reputation for fulfillment.

“[JD] have faster shipping speeds, and the quality is more trustworthy,” Zoe Li, who works at a tech start-up in Beijing.