Bond Cliff

Main Menu

  • Home
  • Economic integration
  • Price index
  • Covariance
  • Labor augmenting
  • Fund

Bond Cliff

Header Banner

Bond Cliff

  • Home
  • Economic integration
  • Price index
  • Covariance
  • Labor augmenting
  • Fund
Price index
Home›Price index›11.11 Sales: Alibaba Singles Day tones muted as China’s economy slows and tech crackdown continues

11.11 Sales: Alibaba Singles Day tones muted as China’s economy slows and tech crackdown continues

By Susan Weiner
November 11, 2021
0
0
But the tone of this year’s windfall is much more cautious than it has been in previous years, as businesses face rising inflation in a slowing economy and regulatory crackdown on their businesses. operations.
Ali Baba (BABA) kicked off the first Singles Day Shopping Festival on November 11, 2009. The event, also known as Double 11, is tied to the informal anti-Valentine’s Day holidays in China that celebrate people who are not in a relationship. The date – 11:11 – was chosen because it is written as four ones, or singles.

Since that first occurrence, Singles Day has turned into a shopping spree seen not only by Alibaba, but also by other e-commerce companies offering their own big discounts and promotions. The deals take place over several days or even weeks. It has also spread outside of China, with Alibaba’s Southeast Asian subsidiary Lazada offering deals in Singapore, Malaysia, Indonesia, Thailand and Vietnam.

It’s an incredibly lucrative event: Last year, Alibaba raked in around $ 75 billion in total sales. Rival JD.com (JD) said at the time that it had reached $ 41 billion in sales.

An inflation puzzle

Alibaba and JD.com, however, hit new sales records this year. Alibaba said Thursday that the total gross merchandise volume (GMV) reached 540.3 billion yuan ($ 84.5 billion) in the first 11 days of November. This is an increase of 8.5% from a year ago.

But this rate of growth has been much slower than in the past. Last year, Alibaba recorded a 26% jump in this metric from the previous year.

Citi analysts also recently forecast that Alibaba’s total GMV could reach 578 billion yuan ($ 90 billion) in the first 11 days of November, a 15% increase from last year.

JD.com also posted record sales, with GMV reaching 349.1 billion yuan ($ 54.6 billion). This was up 28.6% from a year ago, slower than the 33% growth rate last year.

While Citi analysts wrote in a recent report that the promotional campaigns “started with strong consumer demand,” they added that they are “cautious” that general sentiment could be affected by a “weakening[ing] underlying economy. ”

China’s economy is growing at the slowest pace in a year as energy issues, shipping disruptions and the deepening real estate crisis wreak havoc on the world’s second-largest economy.
Inflation, meanwhile, has increased, threatening to erode profit margins and the purchasing power held by consumers.

The cost of goods leaving Chinese factories rose another record high last month – China’s producer price index jumped 13.5% in October from a year ago – and there are now signs that rising costs are being passed on. China’s consumer price index rose 1.5% in October from a year ago, double the rate the previous month and the fastest rate of increase since September 2020.

“On the one hand, soaring input costs have drastically reduced the profit margin for downstream manufacturers, which in turn limits the space to deliver a significant discount this year,” said Alicia Garcia Herrero, chief economist. for Asia-Pacific at Natixis, a French investment banking company. “On the other hand, domestic consumption has not yet returned to pre-pandemic levels[s] and even online retail sales, which remained relatively resilient in 2020, slowed. “

The misfortunes of repression

This year’s shopping event is also taking place under the shadow of a broad government crackdown on private companies.

Ecommerce businesses have not escaped this scrutiny and, in many ways, have been at the center of it. Alibaba was hit earlier this year with a record fine of $ 2.8 billion for acting as a monopoly, and the company has lost hundreds of billions of dollars in market value as Beijing’s reforms take shape .

JD.com, Tencent, Pinduoduo, Meituan and other companies have also been investigated or fined for alleged anti-competitive behavior.

Many companies have also rushed to donate billions of dollars of their own profits to government social causes, as President Xi Jinping has made it clear his priority is to redistribute wealth and achieve “common prosperity.”
Alibaba has pledged to donate 100 billion yuan ($ 15.6 billion) by 2025 to support Beijing’s “common prosperity” campaign. Pinduoduo said in August that he would donate all of his profits for the June quarter to rural development projects in China, and expects to donate a total of 10 billion yuan (1.5 billion dollars) to such causes. JD.com unveiled a plan late last year to “revitalize rural China” using the cash and its logistics infrastructure.
Singles Day has entered Beijing’s sights. On Saturday, the State Administration of Market Regulation – the country’s antitrust regulator – banned e-commerce platforms from participating in unfair practices during the holiday shopping season, such as “raising the prices of items before to put them up for sale ”.
China is
Last week, the Ministry of Industry and Information Technology, which oversees the internet industry, summoned Alibaba, JD.com, Pinduoduo and Meituan and warned them against spamming consumers with messages marketing on Singles Day.

“Large internet platforms appear to be more cautious in marketing and promotions this year to refrain from violating antitrust regulations,” said García Herrero of Natixis.

Support Beijing

Companies are also rushing to support government initiatives to strengthen social equality or reduce carbon emissions, two of Xi’s main political goals. Particular attention has been paid to the climate, with China even pledging this week to step up its climate ambitions in an agreement with the United States. (However, China is still the world’s largest consumer of coal, and has not previously signed a statement at COP26 committing to phase out the use of coal.)

Alibaba said it will move from pure sales numbers – typically the title of each year – to sustainability and inclusiveness.

“This year’s Festival marks a new chapter for 11.11,” Chris Tung, Alibaba Group Marketing Director, said in a statement. “We believe we need to harness the power of 11.11 to encourage sustainability and promote inclusion among consumers, merchants and partners in our ecosystem.”

Xi says China is ready to work with US as Biden meeting slated for next week, source says

The company said it would showcase energy-efficient products on its services and distribute 100 million yuan ($ 15.6 million) in “green” coupons to encourage people to buy more sustainable products. She also wants to reduce the carbon footprint of the event by recycling the packaging she uses.

The company has also said it wants to support “vulnerable populations” and its Taobao app has introduced a “senior mode” option. The new feature is designed to be more accessible to older people with an updated interface and voice assist technology.

JD.com also announced that this year’s Singles Day will be “the biggest where renewable energy is used, and the one where [JD.com] will push for a reduced carbon footprint. “

Related posts:

  1. Uranium Week: Uranium Value Rise Forecast
  2. Profitable mortgage ‘thaw’ and booming costs eased stress on banks and debtors
  3. Westpac says dairy business is in ‘candy spot’ anticipated to proceed
  4. As lumber costs skyrocket, OSU professor develops option to predict value modifications
Tagsasia pacificconsumer priceprice indexreal estateunited states

Categories

  • Covariance
  • Economic integration
  • Fund
  • Labor augmenting
  • Price index
  • TERMS AND CONDITIONS
  • Privacy Policy