Alibaba rival JD.com announced on Sunday that it experienced transaction volume during its Singles Day event (Nov. 1-11) of roughly $19.1 billion (RMB127.1 billion), up more than 50% from last year. Alibaba itself during the Singles Day period reported a record $25.3 billion in sales, blasting past last year’s record of $17.8 billion, itself a 32% increase over 2015.
In just the first hour of the Singles Day event on Nov. 1, JD's recorded $60 million in sales — a year-over-year increase of 110%, according to a report from retail think tank Fung Global Retail & Technology emailed to Retail Dive.
That’s on top of record sales on JD's own yearly "6.18" sales event in June, which saw $17.6 billion in transaction volume for the first 18 days of the sale (June 1-18), also an increase of "well over 50%" compared to the first 18 days of the sale last year, the company said in a press release.
JD.com, which has partnered closely with Walmart in China, is presenting Alibaba with serious competition, even during Alibaba’s own signature red-letter shopping event.
"JD.com’s performance will be a cause for concern for Alibaba," Maggie Gilliam, director of executive education at global intelligence and advisory firm PlanetRetail RNG, told Retail Dive in an email. "JD is rightly making much of its [approximately] 50% sales growth, and it needs to be noted that its biggest-selling brands were all tech/mobile telecoms brands."
That suggests that JD is actually attracting more premium shoppers than Alibaba, and that JD is therefore gaining an edge among higher-end Chinese consumers, Gilliam noted. "Both platforms have been working hard to court this shopper segment in the past year, but JD’s services offer for premium shoppers (e.g. White Glove Express fulfillment) may well be a differentiator here," she said.
Still, Alibaba has been ahead of JD.com on internationalizing its offer and events like Singles Day will be key to establishing the international AliExpress unit in growth regions like Latin America, India and Europe, she said.
JD's Chinese marketplace is also integrating with Tencent's WeChat messaging app, providing customer purchasing data that can help with product recommendations and other features like messaging users with the help of artificial intelligence. That provides a significant advantage, according to the Global Ecommerce Leaders Forum.
"Although [Alibaba’s] Tmall is where the Chinese shop online, WeChat is where they live," according to a GELF report emailed to Retail Dive. GELF’s research also found that 64% of U.S. marketers plan to implement Tencent’s WeChat in the next two years. "WeChat offers a valuable opportunity to connect and communicate directly to Chinese shoppers. As one executive explained, 'Today WeChat feels like the early days of Facebook marketing.'"
That’s a clear answer to Alibaba’s proposition to provide Chinese consumers with media beyond shopping. After turning quarterly results that reflect healthy sales in a still-growing Chinese economy and benefit from a healthy middle class, Albaba executives in August said that its robust numbers are also the fruits of efforts to connect to Chinese consumers, socially and culturally. Alibaba Executive Vice Chairman Joe Tsai said that what the company calls "the Alibaba Economy" is "self-reinforcing" and must be looked at holistically.
"We're seeing both Alibaba and JD.com join with other tech giants to form multi-platform ecosystems that are giving access to consumer behavior across channels," Liz Flora, editor of APAC Research at L2, told Retail Dive in an email. "For example, JD.com partners not only with WeChat, but also with search giant Baidu, while Alibaba has invested in multiple platforms including Weibo and Youku. These partnerships allow the e-tailers to facilitate cross-channel promotions as well as gather data that can connect purchase behavior to other information such as entertainment consumption, search, and social media activities."