Alibaba prepares deep discounts and extra help for merchants ahead of this year’s Singles’ Day shopping extravaganza

Alibaba is promoting a membership system for brands to boost sales during the annual shopping extravaganza
Tmall is working with around 30 industrial clusters, including female clothes-makers in Guangzhou, to help with training for the event

E-commerce

Tracy Quin Shanghai

Published: 8:00am, 15 Oct 2022

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Alibaba Group Holding is preparing to kick off its iconic Singles’ Day shopping festival with steep discounts and broad support for merchants as the Hangzhou-based e-commerce giant seeks to offset downward pressure on consumer spending amid mounting economic headwinds in China.

Alibaba is promoting a membership system for brands to boost sales during the annual shopping extravaganza, which begins on November 11, and providing them with various support measures to reduce costs and increase traffic. More than 40 merchants on Tmall, Alibaba’s business-to-consumer platform, have 10 million members or more, giving them a solid foundation to secure sales goals, the company told the Post on Friday.

Tmall is working with around 30 industrial clusters, including female clothes-makers in Guangzhou, capital of southern Guangdong province, male clothes-makers in Suzhou in southeastern Jiangsu province, and shoe makers in Wenzhou, eastern Zhejiang province, to provide them with training ahead of the big sales event. Pre-sales for Singles’ Day begin on October 24.

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Meanwhile, merchants and live-streamers have already sent messages to the public in the build-up to the shopping festival in an early bid to grab consumer attention. Austin Li Jiaqi, known as the ‘Lipstick King’ and who recently returned to Taobao Live after a three-month disappearance, has published details of some of the products – with prices – he will be selling via his Weibo account during the event.

In an article published on its WeChat official account earlier this week, Shenzhen-listed department store firm Easyhome New Retail Group Corporation said it was receiving extra help from Alibaba to meet its sales goals during this year’s sales festival.

The world’s largest online shopping festival will this year take place against a backdrop of slowing GDP growth, a domestic property crisis and the impact of strict Covid-19 lockdowns – all of which are pressing down on consumer sentiment. However, retail sales beat expectations to rise by 5.4 per cent year-on-year in August, up from the 2.7 per cent growth in July.

Alibaba in August reported a 50 per cent drop in net income to 22.74 billion yuan (US$3.4 billion) in the June quarter, down from 45.14 billion yuan in the same period last year. Revenue was basically flat at 205.56 billion yuan last quarter, compared with 205.74 billion yuan a year ago.

Daniel Zhang Yong, chairman and chief executive of Alibaba, said in an August conference call that gross merchandise volume (GMV) – a measure of the value of goods sold – on Taobao and Tmall experienced a “mid-single-digit percentage decline year-on-year” during the June quarter.

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Alibaba said last year that GMV during the 11-day Singles’ Day event in 2021 totalled 540.3 billion yuan.

In a research note, Citic Securities said the discounts Alibaba is preparing for this year’s event are deeper than those last year, and roughly the same level seen during this year’s June 18 shopping festival. However, analysts remain optimistic on sales even though the company is facing short term pressure, according to the report.

Alibaba owns the South China Morning Post.