Fresh from pulling off the world’s largest IPO, China’s Alibaba Group Holding Ltd (阿里巴巴) is set to impress Wall Street with record sales on China’s Singles’ Day holiday yesterday, the year’s biggest online festival, but merchants complain that they bankroll the e-commerce giant’s big day.
Last year, Alibaba reported sales of US$5.75 billion on the day and this year merchants believe it is aiming for a headline-grabbing US$8 billion or more in gross merchandise volume.
It looked likely to comfortably exceed that estimate, since before midday yesterday Alibaba founder and executive chairman Jack Ma (馬雲) told China’s official state broadcaster that it had already hit 30 billion yuan (US$4.9 billion).
Photo: Reuters
However, merchants told reporters that they had felt pressure from Alibaba’s Tmall.com (天貓) to boost the day’s figures with heavy discounts and delayed recognition of earlier sales.
There is no obligation on merchants to take part in the festival, but if they do, the only discount option is 50 percent or more.
On Tmall, merchants say that if they do not price products lower than in their stores on rival sites, Alibaba pushes them down the sales page, effectively limiting their access to hundreds of millions of potential customers.
When asked if this is true, Alibaba said: “We decline to comment on competitor’s activities.”
One merchant who closed his shop on Tmall earlier this year said: “[Tmall] hoped my sales numbers ... looked good and higher than sales at other e-commerce platforms.”
“When I did not obey, my rank slipped ... It really hurt my sales,” he said.
Alibaba is employing what it calls a “presale initiative,” under which merchants advertise products at their discounted Singles’ Day price from as early as Oct. 15. Tmall lets customers put down a deposit for the order, but only allows merchants to process the full payment and ship the products on Nov. 11.
The company said it has used such a scheme since 2012, since it helps merchants plan the logistics of shipping such large volumes of goods. Merchants said this year it was used much more widely and was aimed at boosting Alibaba’s figures.
“This is a way that they can actually count that volume all transacted in one day,” said one online store manager who asked not to be named in case it damaged his business. “They have never done a company-wide policy like this.”
The efforts by e-commerce sites to boost the figures on Singles’ Day have not gone unnoticed by regulators.
Last week, Chinese media outlets reported that China’s State Administration for Industry and Commerce took aim at 10 of China’s biggest e-commerce firms, ordering them to not engage in activities like artificially jacking up prices in the run-up to the event so they could claim huge discounts when those prices were slashed.
Merchants said Alibaba ensures discounts are genuine by having vendors discount their products from their lowest price within the 60 days before and after Singles’ Day.
Though some vendors lament the pressure on their margins, Alibaba says the festival has grown from just 27 participating vendors in 2009 to 27,000 now.
“Sellers like this kind of big promotion because it increases our sales, but I would live more comfortably if it’s a rational environment of competition,” the former Tmall shop owner said.
“We would rather take money and use it for customer acquisition,” the online store manager said.
He put it down to Alibaba’s desire to please its new backers on Wall Street with figures to support the group’s eye-popping market valuation of US$285 billion after its September IPO.
“Consumers love it: They are getting cheaper stuff, but just because [Alibaba] did the IPO, they want to have extraordinary results,” he said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day