Where will the war between Alibaba Group Holding Ltd (NYSE:BABA) and JD.com (JD) end?
Alibaba Group Holding Ltd (NYSE:BABA) and its archrival JD.Com Inc (ADR) (NASDAQ:JD) are at war again. The two digital commerce companies have always been on each other’s neck. In the latest case, their squabble revolves around the upcoming Singles’ Day, a major shopping event in China that rivals Black Friday and Cyber Monday in the U.S. JD is complaining that Alibaba is breaking the law to punish its competitors.
Alibaba Group Holding Ltd (NYSE:BABA)’s success, or practice if you like, is making competitors uncomfortable and JD is one of them. In an escalation of their competition wars, JD has asked Chinese antitrust regulators to investigate Alibaba’s business practice. JD in particular is calling for a probe into Alibaba’s treatment of merchants ahead of the usually big shopping day called Singles’ Day.
In its submission to China’s State Administration of Industry and Commerce (SAIC), JD accuses Alibaba of blocking merchants from using rival platforms for Singles’ Day sales. According to JD, Alibaba’s behavior contravenes the law and should not be tolerated. JD said in a letter to the regulator that its action to report Alibaba was triggered by multiple complaints it received from merchants.
SAIC admits JD’s complaints
SAIC has accepted JD’s complaints and has even transferred the case to Alibaba’s home provice of Zhejiang.
In response to JD’s accusations, Alibaba’s executives have claimed that their rival has simply panicked over Alibaba’s superior business strategy.
It was Alibaba Group Holding Ltd (NYSE:BABA) that came up with the Singles’ Day shopping festive in 2009, which it calls Double 11 or 11:11. The shopping event takes place annually on November 11, thus the 11:11 description. In China, Singles’ Day is also viewed as their alternative to Valentine’s Day.
Last year, Alibaba posted record sales of $9.3 billion on Singles’ Day. The company also moved 278 million orders on the 2014 Singles’ Day.
With the success that Alibaba Group Holding Ltd (NYSE:BABA) has built around the Singles’ Day shopping event, rivals such as JD also want to have the spotlight as well, which explains the wrangling over the treatment of vendors.
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