Alibaba Group Holding Ltd looks set to record a settler ‘Singles Day.’ Started in China in the early 1990s, this obscure holiday was turned into a mega buying event by Jack Ma in 2009, when he decided to sell everything from electronics to clothing at massive discounts.
This year’s Singles Day is shaping up into a two-horse race between Alibaba and JD.com. Both have forged major alliances and put substantial effort into claiming market share ahead of the day.
Alibaba unveiled its Singles Day promotional campaign on October 13, while JD kicked off its own activities about a fortnight later.
“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, wrote to clients.
Yap predicts sales to hit record volumes. “We expect Alibaba’s mobile gross merchandise volume to record a new high during this year’s Singles Day.” Last year, Alibaba’s total sales on Singles’ Day soared up to 57B yuan ($9B) within the first 24 hours.
Alibaba, JD.com Rivalry Turns Acrimonious
Last week, Alibaba Group Holding Ltd was accused by JD.com of ‘coercing’ sellers in the run-up to Singles Day. Ahead of the world’s biggest online shopping event on November 11, JD lodged a complaint with the Chinese commerce watchdog.
The Tencent Holdings-backed firm has accused Alibaba of forcing sellers to promote their products on its Tmall outlet. Alibaba has denied the claim.
The retail giant claims its smaller rival is “panicking because they’re losing”.
“They simply can’t match our customer experience and logistical scale. We provide a superior experience for users on our platforms,” Jim Wilkinson, an Alibaba Senior VP, said.
The Chinese body noted the charge and warned sellers “not to use malicious marketing methods to engage in competition,” the Xinhua news agency reported.
Singles Day leaves Jim Chanos cold
The prospect of Alibaba Group Holding Ltd ’s record ‘Singles Day’ sales does not excite Jim Chanos. The founder of hedge fund Kynikos pitched Alibaba as a short. Speaking at a Morgan Stanley Lyford event on Friday, Chanos cited “accounting concerns” as the reason for his bearish stance.
Chanos has been down on China for a long time. He warned in September that the country was running out of ways to borrow. He further added that this would lead to a “credit event.”
“The debt is still growing two to three ‘X’ the economy every year,” he said.
Shares of Alibaba Group Holding Ltd fell on the news. They closed Friday at $83.61, down 2 percent.