Why China Isn't Killing Alibaba

Investors who correlate China's economic woes as being a bearish sign for its largest e-commerce player, Alibaba Group Holding Ltd BABA, may be mistaken. That is, at least according to MKM Partners latest survey involving Chinese consumers.

Barron's posted MKM Partners latest survey of Chinese consumers with a focus on: 1) spending intentions, 2) preferred shopping sites, 3) preferences of online marketplace versus direct seller, 4) impact of mobile and 5) receptivity to new online categories.

The analysts also included questions in their survey to identify what impact (if any) the recent decline in the stock market has on spending.

Bricks-And-Mortar Versus Clicks-And-Order

Moreover, Alibaba's properties (including Tmall and Taobao) are preferred by 67 percent of respondents, while one of Alibaba's closest peers, JD.Com Inc(ADR) JD, is preferred by 19 percent. Amazon.com, Inc. AMZN ranked third at 6 percent, while every other online retailer combined accounted for the other 8 percent.

Consumer Feedback

"We are encouraged by initial consumer feedback that a potential spending dislocation may be somewhat muted and may accelerate the shift in allocation to online," MKM Partners noted in its findings. "The currency devaluation should help Alibaba's cross-border initiatives but do little to offset the conversion drag on dollar-denominated earnings per share (about 5 percent)."

Bottom line, the analysts continue to believe that Alibaba's long-term thesis remains intact and recommend that investors "continue to accumulate" Alibaba shares.