- Facing slowing e-commerce growth, Alibaba (BABA +1.4%) and JD.com (JD +2.1%) are competing over merchant data services deals that promise seas of new shopper data in return for closer ties.
- Those deals have been enabled by a number of factors including widespread use of smartphone payments, facial recognition technology and a greater Chinese tolerance for data sharing among companies.
- The two companies are facing saturated markets in China's biggest cities, not to mention trade-war concerns and hotter competition. Data partnerships are giving them a route to diversification and potential new revenue.
- For example, JD says it's used data to help Kimberly-Clark diaper brand Huggies find out why Chinese rivals were gaining ground, prompting the company to switch to a new material that has boosted JD's sales of the diapers.
- The two say they're not charging companies for most data services just yet, noting the partnerships promote sales of other services like cloud computing and logistics.