Singles Day Is More Than Just Alibaba

Over the last decade, ecommerce company Alibaba Group has done a masterful job linking itself to Singles Day, drumming up excitement each year with a variety show countdown starring A-list celebrities, and scaling its humble beginnings as a coat sale to a $1-billion-an-hour retail frenzy. This year, Alibaba promised its Singles Day "will be the largest-ever in terms of scale and reach.” It will be hard to top last year, in which it sold $25.3 billion in gross merchandise volume. However, it has at least one additional arrow in its quiver this year: 500,000 items were available for pre-order on B2C platform Tmall starting Oct. 20. But while it may seem Alibaba is synonymous with Singles Day, it's not the only show in town: Popular local platforms like Suning, VIP.com, Vmall.com and Kaola.com are all advertising their own 11/11 offers this year. So is Chinese ecommerce company JD.com. The second most trafficked website in China in terms of unique visits behind Alibaba, according to ComScore, saw $19.1 billion in transactions in 2017. (Although that figure accounts for Nov. 1 to 11.) Goods sold in that period run the gamut from 2+ million hairy crabs to 1.5 billion diapers, 55 million facial masks, 290 million rolls of toilet paper and 400,000 watches. JD won’t have the star power of Australian supermodel Miranda Kerr to pump up the volume like Alibaba will, but that’s not to say this homegrown ecommerce platform won’t resonate with Chinese consumers on Singles Day, too. It has a secret weapon of its own in American retail giant Walmart, which it has worked with since 2016. They extended the partnership the following year, saying it was “helping boost the popularity of U.S.-made products in China and allowing shoppers to directly buy goods from Walmart stores on the JD.com platform.” JD started out as an electronics retailer in 1998. It rolled out its online business in 2004 following the SARS epidemic, which Lori Chao, director of international communications at JD, said was because people were afraid to go outside to shop and it was able to fulfill a need. It has since expanded into categories like consumer goods, food, luxury items and furniture and says it is the largest retailer in China. Today it is mostly online, but does operate 20 unmanned stores—called X-Marts—in China and Indonesia, and a chain of upscale supermarkets called 7Fresh. Chao said Chinese consumers used to be very price-oriented, but as disposable income has grown, other issues like public safety and quality—especially with goods like food or baby products—have taken precedence. “One thing that sets us apart is we control the supply chain pretty strictly. We have zero tolerance for fakes—we are known as the authentic product seller in China,” Chao added. “Customers that come to us tend to be more quality conscious and willing to pay extra for assurance the products are what they’re supposed to be.” And because JD controls its supply chain, it also means JD can predict demand. “In any given market, the largest retailer has the biggest advantage, whether it’s pricing, access to products or being able to predict how many of a certain type of product we will sell,” Chao added. “We hold that data because we are a first-party retailer—there’s a lot of advantage from that. We can prevent fakes and establish close relationships with retailers.” Figures from financial services firm J.P. Morgan show China is the largest retail market outside the U.S. with $2.2 trillion in overall retail sales. It can also deliver the goods. Per Chao, when JD started, there was no national carrier or reliable way to make deliveries, which is why JD built its own network. JD says it now covers 99 percent of China’s 1.4 billion citizens and includes more than 500 warehouses and 7,000 delivery stations. As a result, JD says it can deliver 90 percent of orders same- or next-day. In addition, it has tested drones since 2016 and has seven types of last-mile delivery drones with nearly 100 routes for rural deliveries in order to expand ecommerce to an underserved population. This, in turn, amps convenience and speed. “Retail was unpleasant in China before—it was fragmented. There were not a lot of chains,” she said. “Having the ability to order something in the morning and get it in the afternoon is a pretty big draw.”

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Singles Day Is More Than Just Alibaba

JD.com sold more than $19 billion in 2017

Lisa Lacy

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Lisa Lacy