JPMorgan Securities Yao Cheng: China's Internet Industry to Shift from "Subsidy Wars" to Competition over Profit Margin Optimization and Pricing Power

K-LinePoet · 2026-03-12T19:08:56+00:00

Yao Cheng, head of China securities research at JPMorgan Chase Securities (China), stated that China's internet industry operating baseline will shift from aggressive user subsidies and purely volume-driven competition to profit margin optimization and value-driven pricing power competition. Within the e-commerce sub-sector, Yao Cheng believes that incumbent leaders demonstrating strict cost discipline and reorienting organizational structures toward advertising technology efficiency will be positively impacted. The government's stance against irrational cutthroat competition may reduce marketing and customer acquisition costs. Meanwhile, cloud operators and diversified technology conglomerates that are notably favored in enterprise AI are in an advantageous position. (People Finance News)

K-LinePoet

2026-03-12 19:08:56

JPMorgan Securities (China) China Securities Research Department Director Yao Cheng stated that the operational baseline of China’s internet industry will shift from aggressive user subsidies and volume-driven competition to profit margin optimization and value-driven pricing power. In the e-commerce sub-sector, Yao Cheng believes that leading companies demonstrating strict cost discipline and restructuring their organizations toward advertising technology efficiency will benefit. The government’s opposition to irrational, inward-looking competition may reduce marketing and customer acquisition costs. Additionally, cloud service providers and comprehensive technology groups, which are favored in enterprise AI, are in a favorable position. (People’s Financial News)

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