Alibaba and JD brace for big shopping battle on Singles Day

Record sales expected for November 11 as online retail giants prepare military-scale operations

PUBLISHED : Sunday, 08 November, 2015, 11:38pm
UPDATED : Sunday, 08 November, 2015, 11:38pm

Singles Day, the annual red-letter day in China that has fostered the world's biggest online shopping festival, is shaping up into a two-horse race between e-commerce giant Alibaba Group Holding and Tencent Holdings-backed JD.com

Alibaba and JD, which provide the leading online retail platforms in the country, have each assembled substantial brand and merchant alliances, as well as set up extensive logistics resources ahead of the event on November 11.

Their rivalry also appears to be acrimonious after JD last week lodged a complaint to regulator the State Administration for Industry and Commerce for alleged anti-competitive practices by Alibaba in Singles Day promotional activities.

"We believe that this year, the investors' focus will be on the competition between Alibaba and JD," Alicia Yap, the head of China internet research at Barclays, said in a report.

Yap predicted "another record sales volume for major players during Singles Day" as the number of participating brands and merchants increase, and more consumers make purchases through their smartphones and tablets.

Alibaba kicked off its promotional campaign on October 13, while JD unveiled its own Singles Day activities about 14 days later.

Alibaba posted US$9.3 billion in gross merchandise volume - the value of goods sold on an e-commerce platform - for the festive day last year as consumers from 217 countries and territories placed 278 million orders for about a million products during that 24-hour period.

That amount of sales far surpassed the US$2.04 billion gross merchandise volume recorded during last year's Cyber Monday, the annual online shopping event held after the Thanksgiving holiday in the United States.

On Singles Day this week, Alibaba's Double 11 campaign will have about 40,000 participating merchants from around the world and 30,000 brands offering more than six million products through its various online shopping platforms, including Tmall, Taobao Marketplace, group-buying site Juhuasan and the AliExpress global retail site.

"We expect [Alibaba's] mobile gross merchandise volume to record a new high during this year's Singles Day, likely higher than the 62 per cent [the company posted] in the recent quarter to September," Yap said.

Mobile transactions accounted for 42.6 per cent, or US$3.9 billion, of the gross merchandise volume notched by Alibaba on Singles Day last year.

While JD claims to have the largest fulfillment infrastructure of any e-commerce services provider in China, Alibaba affiliate Cainiao Logistics has prepared a military-scale operation on November 11.

Cainiao estimated it would deploy more than 1.7 million delivery personnel, 400,000 vehicles, 5,000 warehouses and 200 aircraft to support this year's campaign.

Yap said JD's promotions started on November 1, allowing it to generate valuable online advertising sales and consumer interest ahead of the much-anticipated event.

JD announced last month a partnership with Tencent, which has a 15 per cent stake in the e-commerce firm, to offer merchants advanced online tools to help target customers and increase marketing through the internet giant's WeChat and Mobile QQ platforms.

JD's Singles Day gross merchandise volume last year was not disclosed. The company said it recorded 14 million orders, of which 40 per cent were mobile transactions.

Singles' Day originated from Nanjing University, where students held the first "11/11" parties in the early 1990s. The young mark it as a day to celebrate being single and treating themselves to a special purchase.

Since last year, Alibaba has aggressively asserted its ownership of the "Double 11" trademark.

The company started the promotion in 2009, with just 27 merchants participating to help raise awareness for the value of online shopping.