Alibaba, China’s e-commerce giant, is intensifying its strategy for this year’s Singles Day shopping extravaganza by compelling merchants to offer the lowest prices on its platforms, Tmall and Taobao. The move is part of Alibaba’s efforts to bolster sales and counter the market share losses it has faced in recent years. The sources, including industry insiders, revealed that the company urged merchants to provide the best prices of the year for the blockbuster shopping event, warning of potential loss of traffic and support for those who did not comply.
Although Alibaba announced plans to offer 80 million products at their lowest prices ever during this year’s Singles Day event, the company’s unusual pressure on merchants underscores the competitive landscape in China’s e-commerce industry. Rivals like Douyin and Pinduoduo have disrupted the market with a year-round approach of lower-cost and discounted items, leveraging strategies like live-streaming to attract consumers and challenge the dominance of mega events like Singles Day.
The sources suggest that Alibaba is taking an aggressive stance by demanding the «lowest prices on the internet, period,» warning merchants of consequences if they offer equal or lower prices on competing platforms. This strategy reflects Alibaba’s determination to compete against rivals who have changed Chinese consumer behavior with daily live-streams and discounted offerings.
Alibaba is taking this approach as it seeks to preserve its e-commerce leadership in China, where its market share has declined to around 40% from nearly 70% in 2019. The Chinese e-commerce market has shifted as consumers have come to expect year-round discounts and promotions through live-streaming platforms, challenging the exclusivity of mega sales events like Singles Day. Some consumers have expressed that Singles Day has lost its relevance due to the daily accessibility of discounts and promotions via live-streaming.
While Alibaba reported $85 billion in sales for Singles Day in 2021, the company has not released gross merchandise value data since then and has scaled back its promotion of the event amid increased regulatory scrutiny. Despite these challenges, Alibaba’s push for lower prices indicates its resolve to remain a dominant player in the Chinese e-commerce market.
This year’s Singles Day event is the first since Alibaba Group’s reorganization into six business units, with the Taobao and Tmall unit remaining under the control of Alibaba Group after the spin-off of other units. This strategy is showing early signs of success, with a significant increase in turnover for over 1,300 brands during the event’s pre-sales phase. Consulting firm AlixPartners estimates an 18% growth in total spend across major Chinese platforms for this year’s event, a significant increase from 2022. This renewed effort to bolster Singles Day sales comes as Alibaba faces increased competition and challenges in the Chinese e-commerce market.
