How China’s Ecommerce Platforms Fared During Singles’ Day

Alibaba’s B2C Tmall service outdid C2C marketplace Taobao

Author: Rahul Chadha

December 11, 2017

China’s massive Singles’ Day ecommerce festival has grown to surpass pretty much every other online shopping event in the world. The event, which began as a sort of anti-Valentine’s Day for lonely college students to celebrate singledom, was usurped by ecommerce giant Alibaba in 2009 and has grown into an increasingly worldwide event since.

According to figures from China e-Business Research Center (CECRC), the festival, held on November 11, generated RMB254.0 billion in ecommerce sales this year, a 45% spike from last year’s figure.

The CECRC also reported that Alibaba generated the lion’s share of sales during the event, at RMB168.3 billion. Alibaba still appears to hold a first-mover advantage over domestic rival JD.com, which generated RMB127.1 billion in revenues this year.

But new data from Fung Group shows a more nuanced picture of how ecommerce platforms are faring during Singles’ Day. A survey of internet users in China conducted by the firm in November found that more respondents (82%) shopped on Alibaba’s Tmall platform than on any other ecommerce site, including Alibaba-owned marketplace Taobao.

That’s an interesting outcome, given that Taobao is widely credited as the platform that built the foundation of Alibaba’s empire. Alibaba does not manage much inventory on Taobao, instead providing a technological platform that allows consumer-to-consumer (C2C) buyers and sellers to connect with one another, while helping out with payments processing and logistics services.

Taobao became well-known as a place where merchants adopted cutthroat pricing strategies to undercut one another, and—whether deserved or not—as a home for counterfeit items.

Meanwhile, Tmall is a platform with a business-to-consumer (B2C) bent. In fact, Alibaba has worked hard to entice brands to open their own storefronts within Tmall. As a result, goods sold on Tmall have a reputation for being of higher quality—and having higher prices.

Tmall’s strong showing during Singles’ Day can be read as another sign that consumers in China are moving upmarket, and are perhaps being influenced by brand loyalty over low prices.

That possibility is also reflected in the relatively strong showing of JD.com, an ecommerce business that has embraced a model of managing its own inventory of goods. Like Tmall, that usually means it serves up authenticated goods with higher prices. Fung Group’s survey found that almost two-thirds of internet users said they shopped on JD.com during Singles’ Day.