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Side-channel insights from Chinese Internet experts: in-depth interpretation of e-commerce, local life and advertising market (Nomura)

2026-07-15·ima-daily5min-0715-73-ec1fbf40c4

Street Signal | Side-channel insights from Chinese Internet experts: in-depth interpretation of e-commerce, local life and advertising market (Nomura)

Nomura Securities released an insight report on China’s Internet industry based on interviews with experts. The report covers expert views on e-commerce (Pinduoduo, Alibaba, JD.com), local life (Meituan) and online advertising (ByteDance, Tencent, Baidu) and other sub-sectors.

The core change is that experts believe that the competitive landscape of various industries has stabilized, and profitability improvement has become a common theme.

For example, the intensity of the "price war" in the e-commerce field is weakening, local living subsidies are becoming more rational, and the growth rate of advertising revenue is better than expected, driven by large customers. This is in contrast to the market's previous concerns about escalating fierce competition and pressure on profit margins.

The logic behind it is that after experiencing brutal expansion in the past few years, Internet giants are fully shifting to the business paradigm of "cost reduction and efficiency improvement" and "profit first". One-sentence conclusion: China's Internet industry has collectively turned the corner, moving from "scale" to "profit".

The improvement of the competitive landscape and the deepening of cost reduction and efficiency increase will become the core driving force for the profit elasticity of major listed companies in the next 1-2 years. Good/bad: Good for profit-first leaders such as Pinduoduo (PDD.US), Tencent (700.HK), and Meituan (3690.HK).

The market may be overly concerned about vicious competition and underpriced for the trend of improving industry profit margins. Catalysts:

1) Each company's 2Q26 financial report verifies the profit margin improvement trend;

2) Whether macro consumption data can support the recovery of revenue growth;

3) Whether regulatory policies for Internet platforms will be further relaxed or tightened.

Full text

Side-channel insights from Chinese Internet experts: in-depth interpretation of e-commerce, local life and advertising market (Nomura)

Nomura Securities released an insight report on China’s Internet industry based on interviews with experts.

Nomura Securities released an insight report on China’s Internet industry based on interviews with experts. The report covers expert views on e-commerce (Pinduoduo, Alibaba, JD.com), local life (Meituan) and online advertising (ByteDance, Tencent, Baidu) and other sub-sectors. The core change is that experts believe that the competitive landscape of various industries has stabilized, and profitability improvement has become a common theme. For example, the intensity of the "price war" in the e-commerce field is weakening, local living subsidies are becoming more rational, and the growth rate of advertising revenue is better than expected, driven by large customers. This is in contrast to the market's previous concerns about escalating fierce competition and pressure on profit margins. The logic behind it is that after experiencing brutal expansion in the past few years, Internet giants are fully shifting to the business paradigm of "cost reduction and efficiency improvement" and "profit first". One-sentence conclusion: China's Internet industry has collectively turned the corner, moving from "scale" to "profit". The improvement of the competitive landscape and the deepening of cost reduction and efficiency increase will become the core driving force for the profit elasticity of major listed companies in the next 1-2 years. Good/bad: Good for profit-first leaders such as Pinduoduo (PDD.US), Tencent (700.HK), and Meituan (3690.HK). The market may be overly concerned about vicious competition and underpriced for the trend of improving industry profit margins. Catalysts: 1) Each company's 2Q26 financial report verifies the profit margin improvement trend; 2) Whether macro consumption data can support the recovery of revenue growth; 3) Whether regulatory policies for Internet platforms will be further relaxed or tightened.

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