Although consumer spending in China is still being constrained by the country’s slowing economy, this year’s Singles’ Day, one of the biggest online shopping festivals in the world, is receiving a budget-conscious makeover. Both Alibaba’s Taobao & Tmall and its competitor JD.com are using aggressive low-price methods, but will this be sufficient to keep customers coming back?
Singles’ Day is a pretty big event in China for customers
Through its live-streaming platform Taobao Live, Alibaba is giving away a record 1 billion yuan (about $137 million) in cash coupons from October 12 to 23. The business wants to provide customers more for their yuan by being the go-to spot for the finest online offers. JD.com, however, is not to be left behind; on October 23, it will launch its own Singles’ Day celebration with an event with the theme “real cheap.” JD.com is also providing price concessions of 10 billion yuan and free shipping for a limited number of products in addition to the sale of over 800 million items.
Interestingly, the e-commerce behemoths are suggesting a shift away from extravagant promotions and toward what Chinese customers appear to want most—low prices—as a result of economic difficulties.
However, this novel strategy has a unique set of difficulties. For instance, JD.com, which saw less-than-impressive retail revenue growth in the most recent quarter, is already feeling the pressure. Jack Ma, the founder of Alibaba, has advised a renewed focus on Taobao and its customer base to survive in a brutally competitive industry. Alibaba is well conscious of the stakes.
It’s uncertain whether either company’s wager on low prices will pay off as they prepare for the yearly shopping frenzy that lasts from late October to mid-November. Consumers are still undecided and cautious about how they would participate in this year’s Singles’ Day, like Shanghai resident Lucy Liu, 27.