Competition among platforms increases, new records expected
Online retailers in China are gearing up for the Double 11 online sales extravaganza, which analysts on Monday forecast would set new records for transactions.
The Double 11 shopping event, or November 11 Singles' Day shopping festival, was launched by Alibaba Group Holding in 2009 to help merchants on its business-to-customer (B2C) marketplace Tmall promote sales.
After years of development, the festival has become a nationwide shopping spree that has eclipsed the combined sales of Cyber Monday and Black Friday, as well as a crucial turf war among the country's major e-commerce companies.
In previous years, the battle usually started at the beginning of November and peaked on November 11.
This year, it appears set to begin earlier and last longer. China's second-largest B2C platform, JD.com Inc, is set to kick off its Singles' Day shopping festival on Wednesday and end it on November 12, according to information the company sent to the Global Times on Monday.
Meanwhile, Alibaba's Double 11 shopping festival, which is usually held for just 24 hours, will run for 24 days this year, which already started from Friday, the company announced on Thursday at a press conference held in Hong Kong.
Tmall's shopping festival on Singles' Day last year had estimated transactions of more than 91.2 billion yuan ($13.5 billion), up 59.72 percent year-on-year. Alibaba expects to exceed the record next month.
"This year's Double 11 shopping festival will maintain its fast growth momentum," as the event will run longer on platforms and consumers' enthusiasm for the event is still high, Ding Xia, vice president of Nielsen China, told the Global Times on Monday.
Despite being cheated by merchants on Alibaba's marketplaces with counterfeits previously, Lexie Huang, a 20-something white-collar worker in Beijing, still has great interest in this year's shopping spree.
"I heard that this year's shopping festival focuses on the promotion of high-quality and brand-name commodities," she told the Global Times Monday. "I also care about prices, but they are not the top priority anymore."
Nielsen's survey indicated that consumers' expenditure during the Double 11 shopping festival this year will grow more than 8 percent year-on-year.
More and more online shoppers in China are becoming practical about quality and after-sales services, according to a report released by Beijing-based market consultancy Analysys International on Thursday.
JD said in another statement sent to the Global Times it had sensed the trend and made plans to aim at China's 100 million-plus middle-class consumers with its internally developed logistics system and more than 100,000 brand partners.
Still, JD seems unable to achieve victory over Tmall. When it comes to online shopping, consumers like Huang prefer Tmall, which she said has more products and brands than other peers.
Alibaba said in a press release sent to the Global Times on Monday that its shopping festival this year involves 98,000 merchants and more than 10 million items from around the world. Sales of global fresh products will start during the festival.
As one of its latest moves to enrich its product categories, JD signed a partnership with Wal-Mart Stores Inc on Thursday enabling it to sell imported products from Wal-Mart.
"The rivalry between JD and Tmall will increase during the shopping festival," Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting, told the Global Times on Monday.
The two follow similar methods and technologies such as live fashion broadcasts and virtual reality to promote their shopping festivals, which means they are targeting the same group of consumers, said Lu.
Both Lu and Ding said that this year, the Double 11 shopping festival will further expand into physical shopping this year.
For instance, domestic home appliance retailer Suning Commerce Group will use the advantages of its physical stores around China to support its Singles' Day online sales promotion from November 1. It will also open a shopping center in the ancient style in Wuxi, East China's Jiangsu Province, to woo consumers.
The China Express Association forecast in mid-October that the number of parcels to be delivered during this year's Singles' Day shopping event is likely to surpass 1.05 billion, up 35 percent year-on-year.
Lu isn't too worried about logistics issues this year.
"The fast development of cloud computing nowadays enables express delivery companies to deal with such a big volume of parcels," he said.
