Chinese consumer demand is slowing down, as evidenced by the results of Alibaba and JD.com.

• The delayed release of quarterly results from Alibaba and JD.com highlighted the weakness in China's consumer market.
• On Friday, Alibaba's Hong Kong-listed shares experienced a 5% increase in value during afternoon trading, while JD's shares saw a 9% rise.
• On Wednesday, WeChat, which is operated by Tencent, reported slower revenue growth from financial transactions.

The slowdown in China's consumer market was highlighted by the quarterly results of Chinese e-commerce giants and 's, as retailers struggle to attract value-conscious customers.

Some major U.S. consumer brands mentioned the decline in demand from China in their second quarter reports, while also stating that local competitors had become stronger opponents.

Alibaba reported a 1% increase in revenue from merchant commissions and advertising on its China platforms in the quarter ended June 30, compared to a 5% year-on-year growth in the previous quarter. However, direct sales saw a 9% year-on-year decline, compared to a 2% decline in the two previous quarters, according to filings.

JD.com reported that its average order value decreased year over year in the quarter ended June 30, partly due to "soft consumer spending." Despite offering slightly higher-priced products and next-day delivery through its in-house logistics business, the company is known for its focus on customer satisfaction.

WeChat, the social media and messaging app, reported slower year-on-year revenue growth from users' financial transactions at 4% in the latest quarter, compared to 7% in the previous quarter and 15% in the year-ago period. WeChat is one of the two leading mobile payment apps in China.

Alibaba announced on Thursday that Ant Group, its affiliate that operates Alipay, experienced a decline in valuation, leading to an impairment charge related to share-based employee awards. This resulted in a 10% year-on-year drop in related profits earned by Alibaba during the quarter.

Retail sales in China grew by 2.7% year on year in July, which is lower than the growth seen in previous months.

The real estate market slump and uncertainty about future income have negatively impacted consumer sentiment in China.

Slower GMV growth

Alibaba reported on Thursday that its primary e-commerce business in China, Taobao and Tmall, experienced "high single-digit online GMV growth" for the quarter ending June 30. Gross merchandise value is a widely used industry metric for measuring sales over time.

The revenue of the Taobao and Tmall group decreased by 1% annually, and Alibaba did not disclose specific GMV figures.

In the most recent quarter, Alibaba announced that Taobao and Tmall experienced a significant increase in GMV, with growth rates exceeding 10%. In contrast, the company had previously stated that Taobao and Tmall's GMV had increased in the previous quarter, but did not provide specific details on the magnitude of the growth.

Tackling value hunters

According to Jasmine Bai, a China internet analyst at Haitong International Securities Group, consumers in China are increasingly prioritizing value-for-money products, regardless of their income level, as she stated on CNBC's "Street Signs Asia" on Friday.

Bai stated that fierce competition among e-commerce platforms such as PDD, JD.com, and Alibaba has resulted in a focus on a more cost-conscious and value-seeking consumer.

In China, Alibaba and JD.com have faced competition from highly discounted products sold on the Pinduoduo app and ByteDance's Douyin, the Chinese version of TikTok.

ByteDance is not publicly traded, and PDD has not announced when it will release its second-quarter earnings.

Price wars on their way out?

According to Nomura analysts, their conversation with an unnamed Douyin employee revealed that the app's e-commerce growth had slowed so much in the second quarter that the company was likely to miss its own target of 30% GMV growth this year.

The report stated that Douyin management acknowledged that an overemphasis on low prices had resulted in a decline in GMV, and therefore, will be easing pressure on merchants this month, allowing them to sell at higher prices.

ByteDance did not immediately respond to a request for comment.

Alibaba, the largest e-commerce player, could benefit from Douyin's actions, which Nomura analysts believe could increase the profit margins of the industry.

On Friday, Alibaba's Hong Kong-listed shares increased by 5% in afternoon trading, while JD's shares rose by 9%. Tencent's shares also traded more than 1% higher on Friday.

According to the latest filings, Michael Burry, renowned for his accurate prediction against mortgage-backed securities before the 2008 financial crisis, has made China internet stocks among his top investments in the last quarter.

— CNBC's Sonia Heng contributed reporting from Singapore.