Wed, Nov 04, 2015 - Page 13 News List

Alibaba ‘pressuring‘ merchants ahead of China’s Singles’ Day

Bloomberg

The biggest rival to Alibaba Group Holding Ltd (阿里巴巴) in Chinese e-commerce is accusing the technology giant of violating market regulations and hampering competition in the run-up to the nation’s largest online sales promotion.

JD.com Inc (京東) filed a complaint with the State Administration for Industry & Commerce (SAIC), the regulatory body overseeing consumer protection, according to JD’s official Weibo account.

The company said Alibaba told some merchants not to cooperate with other e-commerce platforms if they were participating in Alibaba’s Singles’ Day promotion this month.

Calling in the regulator is the latest twist in the battle between the companies for Chinese customers that has already seen Alibaba invest US$4.6 billion for a stake in a retailer to challenge JD’s core strength of consumer electronics. Singles’ Day on Wednesday next week has morphed into China’s biggest excuse to shop, leading e-commerce operators to flood the Internet with promotions and discounts.

“After receiving reports from dozens of apparel retailers that a competitor is inappropriately pressuring them to pull out of JD.com’s Singles Day promotions, we have formally requested an SAIC investigation,” JD said in a text message.

Two phone calls to the SAIC’s market department went unanswered during non-working hours.

Alibaba, which started Singles’ Day in 2009, began replicating its success overseas last year, seeing sales spikes led by Russia. Last year more than 57.1 billion yuan (US$9 billion) of transactions were conducted through Alibaba’s platform during the promotion.

“Alibaba welcomes competition as it benefits consumers, merchants and service providers. It also contributes to the growth and diversity of the e-commerce ecosystem, which in turn will benefit our business,” Hong Kong-based Alibaba spokesman Rico Ngai said in an e-mailed statement.

Separately, more than 40 percent of goods sold online in China last year were either counterfeits or of bad quality, the official Xinhua news agency said, citing a report which was delivered to China’s top lawmakers on Monday.

The report indicated that just below 59 percent of items sold online last year were “genuine or of good quality,” Xinhua said.

China has been trying to shake off a notoriety for pirated and counterfeit goods, long a major headache for global brands targeting the Chinese market from iPhone maker Apple Inc to luxury retailer LVMH.

Alibaba has been lobbying to stay off a US blacklist for fakes after coming under renewed pressure this year over suspected counterfeits sold on its shopping platforms.

The report called for “accelerated legislation in e-commerce, improved supervision and clarification of consumers’ rights and sellers’ responsibilities.”

Online sales in China grew 40 percent last year to 2.8 trillion yuan.

Additional reporting by Reuters

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