Alibaba vs. JD.com: Strategies, Business Models, and Financial Statements

This case analyzes the strategies, business models, and financial statements of Alibaba and JD.com (JD). We discuss how different strategies and business models result in different financial characteristics and examine the close relationships between strategy, business models, and financial statements. The discussion will also involve profit models, asset allocation, investment strategy, financing strategy, etc., to help students gain a deeper understanding of the development pattern and investment value of enterprises with differing strategies and business models. We have also developed another case Alibaba vs. JD.com: financial statements and investment value analysis, which analyzes the profitability and growth potential of Alibaba and JD after their IPOs and their impact on the market value of the two companies. This series case guides students in making investment decisions from the perspectives of financial statement analysis. The lecturer can use these two cases as a series, or just one of them. After more than ten years of development, two giants were born in China’s e-commerce industry: Alibaba, the world's largest e-commerce platform, and JD, China's largest business-to-consumer (B2C) e-commerce retailer. In 2014, Alibaba and JD were listed successively, and in the first half of 2015, both companies published their first financial statements following their listing. These two financial statements soon attracted the attention of Zhang Wei, a sell-side investment manager who had just graduated from his EMBA program. To prepare for questions from his clients, he began to think about the differences between the strategies and business models of Alibaba and JD. How would these differences affect their financial statements? What are the investment highlights of the two companies?