Alibaba will dominate online annual sales promotion again, analysts say
China's second-largest e-commerce operator JD.com Inc and Internet mammoth Tencent Holdings strengthened their data-sharing partnership over the weekend to improve JD retailers' brand recognition and sales in the annual online shopping event, which takes place on November 11.
JD CEO Liu Qiangdong said in a press release issued on Saturday that with the help of Tencent Holdings' popular social networking services, WeChat and QQ, JD will see the largest traffic volume during this year's 11.11 sales promotion.
"Given (our) cooperation in the past one and a half years, 20 percent of JD's new users in the second quarter of the year were from WeChat and QQ," Liu said.
Shenzhen-based Tencent, which has a 15 percent stake in JD, amassed 843 million monthly active users on QQ and 600 million on WeChat in the second quarter, according to its quarterly statement released in August.
Despite Tencent's massive user base, analysts said that JD would still be unable to generate the largest transaction volume in this year's 11.11 shopping festival, which has been held since 2012.
The 11.11 event, an online shopping event launched by Alibaba to boost sales via discounts and coupons, brought the e-commerce giant's business-to-consumer platform t.com 57.1 billion yuan ($8.99 billion) last year.
"Alibaba Group Holding, the creator of the shopping event, will remain the winner," Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting Co, told the Global Times on Sunday.
With respect to in-demand goods for the 11.11 event - mainly clothing and cosmetics - Alibaba's online marketplaces are usually seen as offering more choices and greater reliability than JD, Lu said.
JD said on its official Weibo that last year, when it held a three-day 11.11 promotion, the company recorded transactions of 2.5 billion yuan.
Liu Dingding, an analyst from Beijing-based Internet intelligence agency Sootoo, sees things differently from Lu.
"Alibaba's transaction growth in this year's 11.11 will surely be curbed by scrappy rivals like JD as well as active brick-and-mortar traditional retailers, many of which, to my knowledge, will also launch off-line sales promotions at the same time," Liu told the Global Times on Sunday.
JD, which offers more than 1.2 million overseas goods from over 3,000 brands, has bet on cross-border e-commerce and rural e-commerce for this year's shopping festival, China Business News reported on Sunday.
Another e-commerce player, Suning Commerce Group Co, said that it would launch an online-to-offline shopping festival from November 6 to 12, media reports said, concentrating on the promotion of big-brand home appliances, signifying a fierce rivalry in this year's 11.11.
No matter what strategy e-commerce platforms follow for this year's festival, they're all focusing on big brand names, said analysts.
JD and Tencent launched a "Brand-Commerce" project Saturday, integrating Tencent's social networking data with JD's shopping data to enable brand-name retailers to better target their potential customers, according to a press release posted on JD's official Weibo.
The project aims to help JD gain support from retailers that are already on Alibaba, with the help of Tencent's powerful social networking services and online video business, said Lu.
"Well-established brands not only play a key role in wooing middle-class consumers, the country's major purchasing force, but also can boost platforms' marketing business," said the analyst Liu, noting that big names are willing to spend more on promotions than their small peers.
