Alibaba Group and JD.com saw their Hong Kong‑listed shares tumble on Thursday after the State Administration for Market Regulation summoned them over alleged false promotions during the annual “618” shopping festival. Alibaba fell as much as 5.9%, its steepest intraday drop in nearly three months, while JD.com matched the decline, marking its worst slide since November.

Regulators accused the platforms of promising tens of billions of yuan in subsidies without disclosing the actual amounts paid by merchants on Tmall, Taobao and JD.com. The name‑and‑shame summons also targeted PDD Holdings, ByteDance’s e‑commerce arms and Xiaohongshu, signalling Beijing’s broader push to curb a price‑war frenzy that has squeezed margins across China’s online retail sector.

The crackdown arrives as consumer‑price growth slowed to 1.2% in May, reflecting weak demand that hampers retailers’ ability to pass higher input costs onto shoppers. Analysts see the regulator’s warning as a signal that further enforcement could tighten profit outlooks for China’s e‑commerce giants, already grappling with narrowing margins.

Investors reacted swiftly, with the Hang Seng e‑commerce index slipping over 2% as the sector absorbed the sell‑off. While the immediate price impact may be temporary, the episode underscores Beijing’s willingness to intervene in market practices that threaten consumer confidence and fiscal stability, a reality that firms must now factor into pricing strategies.