Beijing - Alibaba, Tencent and JD.com reported this week that it reflects not only improving consumer spending in China, but also the growth of AI in advertising.

E-commerce giant Alibaba It said late Thursday that its sales to TAOBAO and TMALL groups increased by 9% year-on-year, with its element rising to RMB 101.37 billion ($13.97 billion) in the three months ended March 31. That exceeded the 97.94 billion yuan fact-set analyst poll, with quarterly growth figures far higher than 3% of the 31st segment on March 31.

“E-commerce and advertising revenue were positive surprises,” Kai Wang, an Asia stock market strategist, said in a letter about revenue results for the three companies.

It is important to note that in April alone, the U.S.-China tensions escalate before the earnings issuance covers, with new tariffs on products of both countries (an effective trade embargo) exceeding 100%. The two countries issued a rare joint statement on Monday announcing that most of the most recent tariffs have been reduced by 90 days.

Charlie Chen, managing director and head of Asian research at China Renaissance Securities, said Friday that the U.S.-China trade dispute has had a negative impact on consumption to some extent, given the increased uncertainty among small and medium-sized enterprises. He expects consumption will rise as trade tensions ease.

But despite overall weak consumption, some electronics and household appliances have performed well over the past year due to China's support for this consumer spending.

JD.com Sales in the category soared 17% from a year ago, it said Tuesday. Overall, the e-commerce company reported revenue from its retail business increased by 16.3% to RMB 26.85 billion in the three months ended March 31. That's better than the 226.84 billion yuan of sales in retail space forecast by Factset poll.

Wednesday, Tencent The field said its "fintech and business services" partly represents consumer-related business transactions, reporting revenue in the first quarter rose 5% year-on-year to RMB 54.9 billion.

Although Nomura analysts said revenue growth in the segment meets estimates, they pointed out in a note: "Although the grand macro environment is challenging," Tencent Advertising is very effective in the Chinese advertising industry. ”

Tencent's marketing services revenue soared 20% to RMB 31.9 billion, helping "strong demand" for short videos and other content in its WeChat social media app. Tencent pointed to "ongoing AI upgrades" to its advertising platform.

According to FactSet transcript, AI is helping Tencent’s click-through rate (the number of online advertising successes) increase by nearly 3%. The company said this is 0.1% click-through rate for historical banner ads, and feed ads have risen sharply.

The average monthly users in WeChat, known as Weixin in China, exceeded 1.4 billion for the first time in the first quarter. The app offers one of two major mobile payment systems used in mainland China.

Many coffee shops and online retailers also use the mini app in WeChat for customers to place orders. Tencent said on Thursday that its e-commerce business has grown so much that it is now a new unit in WeChat.

"AI ADS improves efficiency and algorithms, and even if macro conditions are not optimal, it should improve the target for consumers," said Wang of Morningstar. "It is too early to quantify how much incremental benefits AI AD brings compared to non-AID AD, but we've seen some monetization of AI-powered advertising."

JD said marketing revenue climbed 15.7% to 22.32 billion yuan in the quarter, also partly due to AI tools.

JD Management said on Tuesday's revenue call that its advertising research and development team is using large language models to increase advertising conversion rates and accelerate AD revenue growth. The company added that it is implementing AI tools that enable merchants to “execute complex campaigns” with simple commands.

Advertisers have long been looking for ways to target ads as consumers who are most likely to buy.

On Wednesday, YouTube announced that advertisers could use Google's Gemini AI model to target ads at the time when they were best at participating in videos.

Alibaba noted that marketing revenue, called “customer management,” rose 12% year-on-year to nearly $10 billion, partly due to the addition of the company’s AI tools to improve marketing efficiency for merchants.

However, Alibaba's total profit accounted for only half of analysts' forecasts, and then stocks fell nearly 7.6% at the U.S. Fair.

China will release retail data for April on Monday. Analysts polled by Reuters predicted retail sales rose 5.5% year-on-year in April, slightly lower than the 5.9% increase in March.

A survey conducted by Morgan Stanley from April 8 to 11 in the U.S.-China immediately after tensions escalated found consumer confidence dropped to a 2.5-year low, while 44% of respondents were worried about job losses, the highest job since the survey began in 2020. The survey found that only 23% of consumers expect to spend more in the next quarter, down 8 percentage points from the previous quarter.

Domestic demand continued in April, with the consumer price index falling 0.1% year-on-year this month, the third month of decline. However, the so-called Core CPI rose 0.5%, the same rate as March when excluding food and energy prices.

With the real estate market not recovering and exports are subject to geopolitical restrictions, Chen expects Chinese policymakers to focus on strengthening consumption to achieve the annual growth target of about 5%.

He expects that relevant stimulus policies will include increased spending on food and beverages, care, travel, sports and durable items, which are not yet included in the trade subsidy program.

June 18 is the next major promotional season to shop in China.

Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC, “I think we’re going to get a pretty good 618. Earlier this week. The company helps foreign brands such as Vitamix and clinical sales online in China and other parts of Asia.

He predicts that 618 sales growth will rise through "very low double-digits".