Strong Singles Day performances demonstrated how online spending is surging ahead even as overall retail spending shows only a modest recovery.

(Bloomberg)—JD.com Inc.’s revenue climbed a better-than-expected 29% after shoppers who shifted online during the pandemic continued to drive a modest recovery in Chinese consumer spending.

Beijing-based JD.com’s sales reached 174.21 billion yuan ($26.5 billion) during the July-September quarter, versus the 170.5 billion yuan average of analysts’ estimates. Its net income surged to 7.6 billion yuan, helped by one-time gains of more than 3.7 billion yuan from the value of investments and other items.

JD, No. 1 in the Digital Commerce 360 Asia 450, joins smaller rival Pinduoduo Inc. in beating Wall Street estimates, after strong Nov. 11 Singles’ Day performances demonstrated how online spending is surging ahead even as overall retail spending shows only a modest recovery. Chinese retail sales growth accelerated in October from the previous month, but missed expectations. JD’s stock was down about 2% in pre-market trading in New York.

JD’s outperformance also coincides with growing regulatory pressure on tech giants. Beijing last week released a set of detailed guidelines to curb monopolistic practices, raising questions about the future of companies from JD and Alibaba Group Holding Ltd. to JD’s backer Tencent Holdings Ltd. Separate rules governing micro-lending have already torpedoed Ant Group Co.’s $35 billion initial public offering, prompting speculation over whether JD.com’s own fast-growing fintech arm will face a longer journey in going public.

Language in the regulations suggests a heavy focus on anti-competitive practices in online commerce, from forced exclusive arrangements with merchants known as “Pick One of Two” to algorithm-based prices favoring new users. Alibaba, JD.com and Pinduoduo have accused each other of using underhanded tactics in the past. On Monday, JD executives said on an earnings call they fully supported the new antitrust regulations because they allowed room for innovation.

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What Bloomberg Intelligence Says: The modest rise in China’s October retail sales of 4.3% year-on-year shows shoppers are still restrained and heightens the risk that December’s receipts may not be enough to limit 2020’s sales fall to 3.2%. November’s retail-sales growth rate could exceed October’s simply because of discounts related to this month’s Singles’ Day shopping festival. Catherine Lim, analyst

Annual active customer accounts increased by 32% to 441.6 million in the 12 months ended Sept. 30, of which roughly 80% came from less-developed citiesthe battleground between JD and rivals like Pinduoduo.

Shares of JD.com in Hong Kong sold off alongside other Chinese technology leaders following the antitrust regulations last week, but have since recouped most of their losses on expectations its arch-rival Alibaba will absorb the brunt of any Beijing action. JD’s stock has more than doubled this year in the wake of a post-pandemic surge in internet activity.

Pinduoduo last week posted a stronger-than-expected 89% surge in third-quarter sales, though Alibaba’s revenue grew at the slowest pace ever for a July-September quarter.

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