Alibaba Prepares Singles Day Sales for the Retail Holiday It Owns—Literally

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11-11 Singles Day

In 2013, the total was $5.75 billion. A year later, it was $9.3 billion. This year, China’s slowdown is not predicted to hold back 11-11 Singles Day spending, with a slight majority of consumers in at least one poll saying they will spend more this year than last. Barron’s Asia has gone as far as to predict 80 billion yuan ($12.5 billion) in spending. But even less bullish predictions have sales hitting at least $10 billion. (For perspective, America’s Cyber Monday racked up $2.5 billion in sales.)

Another good predictor of increased sales over last year (and click here for the actual tally)? China’s state-run postal authority is preparing to make 760 million express deliveries between November 11 and 16, a 42 percent increase from last year. A great slideshow from state news agency Xinhua lays bare the enormity of the logistics involved.

Singles Day

Singles Day started in the 1990s on university campuses as a kind of celebration of bachelorhood and slowly graduated to a consumer holiday. The greatest chunk of 11.11 sales will be with the Alibaba group, which through its online retail tentacles has effectively come to own the holiday—quite literally: in 2012 Alibaba trademarked “双十一”  (shuāng shíyī; “double eleven”).

Between its many platforms—including Taobao, tmall.com, eTao.com, AliExpress.com—Alibaba will offer hundreds of thousands of products from approximately 1,000 domestic and 5,000 international brands. The sales volume is so expansive that it impacts markets where Singles Day is barely known. For example, China’s distrust for domestic baby formula brands has created a mass shortage of organic baby formula in Australia. The Hangzhou Economic and Technological bureau reported that it has already cleared about 10 million imported items in preparation for Singles Day sales and delivery.

Singles Day

To look at 11.11 sales as the overwhelming deal explosion that it is, go to Tmall.com’s dedicated Singles Day deals page where everything is at least half off.

But a pall hangs over this year’s Singles Day as brands’ sales jubilation will be combined with distress over the counterfeit situation run amok in China. China’s counterfeit merchandise regulator, State Administration for Industry and Commerce, recently noted that reports of counterfeit or defective products in online marketplaces registered has increased 356 percent in the past two years. The authority estimated that approximately 40 percent of products from online retailers are either fake or of unacceptable quality.

A handful of luxury brands, including Kering SA, YSL and Gucci, recently sued Alibaba for knowingly facilitating intellectual property violators. Alibaba founder Jack Ma has been defiant, recently saying, “I would [rather] lose the case, lose the money. But we would gain our dignity and respect.” Ma characterized Alibaba as “soldiers” fighting counterfeiting “terrorists.” A month ago Ma said that Alibaba is also a victim of counterfeiters.

starwars

But products that probably violate intellectual property protections are still easily found on Alibaba’s network. For example, there is the Star Series X-Wing fighter Lego toy on AliExpress.com (Just $18.62 for 11.11) and some questionable DC and Marvel Comics garments. Of course, there is the ongoing headache surrounding China’s massive sports jersey counterfeit operation.

Ironically enough, last year Alibaba threatened legal action against its competitors for using its trademarked “双十一” in advertising for the holiday.

Alibaba says it’s cracking down on fakes but at the individual consumer level the results vary. As the Financial Times reported, some Alibaba retailers offer full refunds for products thought to be counterfeit—but only after the buyer produces an official “certificate” of inauthenticity.

If the counterfeit scandals weren’t enough to cast Alibaba in a poor light this Singles Day, rumors of its treatment of competitors surely will. Alibaba competitor and China’s second-largest online marketplace, JD.com, officially complained to Chinese authorities that Alibaba is pressuring retailers to handicap JD.com’s Singles Day promotions. A new law this year makes it illegal for e-commerce platforms to restrict retailers from joining other platforms. Cosmetics giant Sephora recently chose JD.com’s platform, citing JD.com’s reliability in fighting fakes.

JD.com Sephora

These accusations of unfair play between its online retailing golden children threatens an embarrassment for China, and authorities there have implored both to cool it a little bit.

These anti-competition complaints follows rumbling from retailers themselves last year, saying Alibaba, seeking an ever higher, record-setting 11.11 sales volume, had strong-armed them to offer unsustainable discounts. For example, some retailers complained that the cost for participating in the daily promotion is a minimum 50 percent price reduction.

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