Morgan Stanley's "Three Questions" to JD.com: With state subsidies on the back burner and powerful enemies around the corner, where is the path for new business?

On November 12, just before JD.com Group released its new quarterly financial report, the capital market took the lead in blowing a cold wind. The internationally renowned investment bank Morgan Stanley (hereinafter referred to as "Mogul") recently released a 35-page in-depth research report titled "JD.com, Inc. Winter Is Coming" (JD.com, Inc. Winter Is Coming). In this research report, Morgan Stanley downgraded JD.com's rating from "equal weight" to "underweight" and bluntly stated that JD.com will be the worst-performing e-commerce stock in the next 12 months.

In the quiet period before the release of financial reports, it is rare for a large brokerage to issue such a bearish and in-depth report. The core of Morgan Stanley's logic points directly to the "triple dilemma" currently faced by JD.com: the fading of state subsidy dividends, the real-time retail business falling into red ocean competition, and the growth dilemma of repeated failures in new businesses in the past.

Morgan Stanley's first critical blow was directed at JD.com's most important growth engine this year - "national subsidy". The report pointed out that JD.com’s unique attributes of self-operated home appliances and electronic products have made it the biggest beneficiary of this round of state subsidy policies. A survey conducted by Morgan Stanley among 2,000 consumers across the country showed that 58% of the respondents said they would choose JD.com as the preferred platform for using state subsidy coupons. This proportion is higher than Taotian Group’s 49%, and far exceeds Pinduoduo’s 17%.

Xiao He is also a success, and Xiao He is a failure. The other side of a high degree of benefit is a high degree of dependence.

Morgan Stanley found through channel research that starting from August 2025, the direction of the state subsidy policy has begun to change, and there are obvious signs of tightening of policies in many places. For example, Jiangsu, Sichuan and other places have begun to implement a "quota system" and issue limited subsidy quotas on a daily or weekly basis; Shanghai, Anhui and other places have adopted a more stringent "lottery system." This decline in policy intensity has directly led to the diminishing marginal effect of subsidy dividends.

Even more serious is the phenomenon of "consumption overdraft". Survey data shows that up to 70% of state subsidy participants admitted that they had advanced the consumption they originally planned to make in the next 1-6 months; another 13% even advanced it by more than half a year. This means that the vast majority of state subsidy users are "overdrawing" their future purchasing power.

The data is already showing signs. In the second quarter of 2024 before the implementation of the national subsidy policy, JD.com’s electronic products and home appliances revenue experienced a 5% decline. With the increase in state subsidies in September, the growth rate of this sector soared to 23% in the second quarter of 2025. Morgan Stanley predicts that as state subsidies decline and the effects of consumption overdraft emerge, this "highlight moment" brought about by policy stimulus will be difficult to sustain. It is expected that JD.com's future revenue growth will quickly fall back to single digits.

The second growth curve that JD.com is trying to find - instant retail, is not a smooth road in the eyes of Morgan Stanley.

Although JD.com's instant retail business has achieved certain results in the early stages, with daily orders reaching a peak of 25 million orders, JD.com seems to be somewhat unable to cope with the attack of the two giants Alibaba and Meituan.

Morgan Stanley pointed out that competitors are frantically burning money to change markets. Alibaba and Meituan are expected to invest 35 billion to 40 billion yuan and 18 billion to 19 billion yuan in instant retail in the third quarter respectively. Under the offensive of giants, JD.com is losing market share. Data shows that JD.com’s instant retail client share has dropped from 11% in the second quarter to 8% at the end of the third quarter.

In addition to the decline in share, Morgan Stanley also listed the troubles of "three-party dissatisfaction" faced by JD.com's instant retail business.client, facingThe delivery time is too long and the transportation capacity is insufficient, resulting in a poor experience.Merchant endThe backend system is not easy to use, and the platform is passing on subsidy costs to merchants. Research shows that the proportion of subsidies borne by merchants has surged from 0% in the initial stage to 70%-80%. Coupled with the collection of commissions and delivery fees, merchants’ profitability has dropped significantly;Rider sideThe average revenue per ride has dropped, and the harsh fine mechanism has led to poor rider experience.

In addition, the self-operated front-end warehouse business "Qixian Kitchen" launched by JD.com also faces the problem of self-consistency in business logic. Its "takeout + self-pickup" model but no dine-in is not only contrary to the rules of its platform, but may also cause dissatisfaction among third-party merchants on the platform by diverting traffic.

Based on this, Morgan Stanley gave a loss forecast: JD.com’s instant retail business (including catering) is expected to suffer an average loss of 9 yuan per unit in the third quarter, and the total loss in 2025 may be as high as 34 billion yuan. This is an extremely expensive war of attrition when the scale effect is inferior to that of its opponents.

Morgan Stanley's third critical blow points to JD.com's problems in new business development in the past five years.

The report summarizes the consistent trend of JD.com’s new business: it often starts with a high profile with large subsidies and grand KPI narratives. After experiencing a short period of explosive growth, it quickly stagnates and is eventually marginalized or shut down.

Morgan Stanley cited three typical cases. For example, about 10 billion yuan was invested in community group buying in 2021, but the business scale was significantly reduced only one year later. "Jingxi APP", which had high hopes, was eventually shut down and renamed "Jingxi Self-operated". It was difficult to establish a low-price mentality. Although live streaming e-commerce has financial and traffic support, its business has always been on the edge due to the lack of a top anchor ecosystem.

Morgan Stanley believes that this historical record of repeated defeats reflects JD.com’s shortcomings in capital allocation and new business incubation capabilities. Unless JD.com’s instant retail business can prove to the market its ability to reduce losses and the synergies with its core e-commerce business, it will be difficult for investors to have confidence in this new story.

In Morgan Stanley's view, the decline in state subsidies is a short-term negative, instant retail competition is a mid-term quagmire, and repeated setbacks in new businesses have exposed long-term strategic execution concerns.

This 35-page bearish report undoubtedly casts a shadow over JD.com, which is about to release its financial report. For JD.com’s management, how to respond to these sharp questions from the market in the upcoming earnings call and how to prove that it still has growth resilience in the post-subsidy era will be the next top priority.

Whether winter is really coming, the market is waiting with bated breath.