Business / Trendsetters

Growth concerns rise for Alibaba

By Meng Jing (China Daily) Updated: 2014-06-18 07:11

Growth concerns rise for Alibaba

People stand next to a logo of Alibaba at its headquarters in Hangzhou, east China's Zhejiang province, Nov 10, 2013.[Photo/IC]

Meanwhile, Chinese online retailers are bracing themselves for a new round of cutthroat competition after the country's second-largest e-commerce player, JD.com Inc, launched a promotional campaign offering discounts and incentives worth 1 billion yuan. The 20-day promotional campaign in June was created by JD.com in 2010 as an annual shopping event to celebrate its birthday on Wednesday. Many Chinese retailers have followed suit with similar campaigns.

Industry sources, however, feel that JD's shopping party cannot match up to Alibaba's Nov 11 shopping festival, which netted sales of 15 billion yuan during the 24-hour sales event.

Forrester Research's Senior Analyst Vanessa Zeng said that: "JD's campaign is similar to Taobao/Tmall's Singles Day event for boosting sales revenue. However, its timing is not ideal, as it clashes with the 2014 FIFA World Cup in Brazil. Advertising and promotional effectiveness of the campaign has been diluted as the soccer event will grab more eyeballs than the JD event."

Despite the bad timing, the JD campaign doesn't mean that JD is not in the same league as Alibaba in terms of e-commerce competition.

Analysts said that with JD's recent initial public offering in the United States and the investment and the resources it has received from Tencent Holdings Ltd, China's e-commerce market has entered a new stage of dual-leadership.

Mo Daiqing, senior e-commerce industry analyst at the Hangzhou-based research company China e-Business Research Center, said JD's recent IPO in the US and the resources it has received from Tencent have made the Beijing-based e-commerce player a strong competitor.

Growth concerns rise for Alibaba Growth concerns rise for Alibaba
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