Alibaba and JD.com are gearing up for Singles' Day
(BII)
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As Singles' Day approaches, e-tailers in China are gearing up for the country's biggest online shopping day of the year.
The November 11event is expected to break last year's sales records and drive up order volume for some of the country's top online merchants. Both JD.com and Alibaba are prepping for the deal day, which brought in billions of dollars in online sales last year.
JD.com is leveraging its partnership with Walmart to drive up engagement ahead of Singles' Day. The two companies announced several initiatives just ahead of Singles' Day that could help boost sales for both retailers, including a Sam's Club flagship store on JD.com, a Walmart Global Imports Store on JD.com, and a two-hour grocery delivery service from over 20 Walmart stores in China.
Putting the focus on its Walmart partnership could help JD.com compete more heavily with Alibaba on Singles' Day, given that Chinese consumers crave foreign-made products, particularly those from the US. In fact, over 60% of Chinese consumers are willing to pay more for products that are made in the US as opposed to China, according to a report from the Boston Consulting Group. JD.com is in second place by market share in the Chinese e-commerce market, but capitalizing on its Walmart partnership could help it onboard more shoppers and convert them into loyal ones after Singles' Day is over.
Alibaba is taking a global approach to drive growth on Singles' Day. The e-commerce giant is launching Singles' Day promotions in Hong Kong and Taiwan in order to replicate its record-breaking performance from last year — during 2015's shopping event, Alibaba alone generated $14.3 billion in sales. This will mark the first time these deals are made available outside of mainland China, though JD.com's partnership with Walmart will make competition within the country much harder.
One way to more heavily compete with JD.com and continue the company's stellar performance would be to highlight its own foreign goods sections and brand partners to better satisfy consumer desires. However, the company's public struggles with the presence of counterfeit goods on its marketplace over the past year could undermine its efforts to grow its performance from last year.
The growing prevalence of mobile could be a boon to Singles' Day results. Seventy-five percent of Alibaba's gross merchandise volume (GMV) now derives from mobile, up from 68% in Q4 2015, when last year's Singles' Day occurred. And the retail giant's mobile GMV stood at $94.3 billion in Q2 2016, up 69% YoY. Additionally, mobile accounted for almost 80% of all fulfilled orders that JD.com processed during Q2 2016, compared with 61% during Q4 2015.
Mobile GMV has been driven in part by increasing conversion rates. Therefore, these competitors could see higher sales on Singles' Day than last year because of higher conversion rates on mobile devices. In addition, mobile arguably has greater potential to drive repeat purchases within a single day compared with desktop, given that users are rather tethered to their phones.
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