While I was preparing a relaxed article on the good results of the Chinese e-commerce giants, a resolution was known in the United States that not only affects Chinese telephone companies. It also prohibits investing in retail giants. The United States Government, still under the mandate of Donald Trump, would be studying the possibility of banning investments in the Chinese giants in the country Alibaba and Tencent, expanding the list of companies banned for alleged links with the Chinese army and secret services.
Alibaba and Tencent They are two digital giants and the two Chinese companies with the most market value. They have a capitalization of over $ 1.3 trillion between the two. After knowing the news on January 6, the titles of Alibaba they closed the session on Wall Street with a fall of more than 5%. While those of Tencent, owner of the very popular instant messaging service WeChat, 4% were left. Shares in both companies continued to decline throughout the next day.
Sales record for Alibaba and JD.com in 2020
The Chinese giants of e-commerce Alibaba and JD.com accumulated around 96 billion euros in sales on their platforms during the shopping event of the Singles day, setting both companies new records. These figures are produced at the time the Singles day, also know as Double 11 Because it happens on November 11, it was extended beyond a period of just 24 hours. Promotions lasted from November 1 to midnight November 12. An event that occurred when the Chinese economy continues to show signs of recovery after appearing to be widely in control of the coronavirus pandemic.
So much for Alibaba how to JD.com, foreign brands have been key in its expansion. Chinese buyers who normally went abroad to buy goods were expected to buy them in China, due to travel restrictions. Sources of Alibaba indicated that of the nearly 250,000 brands that participated in the Singles day this year, 30 thousand were foreigners. The United States was the country that sold the most to China. However the Singles day it’s not just about driving sales. So much Alibaba as JD.com They see it as a strategy to acquire new customers in smaller Chinese cities. Customers there are much more price sensitive.
Tightening of control by the Chinese authorities
Recently, the Chinese authorities have begun to actively tighten the regulation of trading corporations online. So, for example, last Sunday, December 27, regulators instructed the subsidiary of Alibaba Ant Group to rebuild the business to operate only as a payment operator. But it was also overshadowed by the huge drops in the price of shares both of Alibaba like JD.com. They came after Chinese regulators published draft rules that, for the first time, define what constitutes anti-competitive behavior.
Investors fear that China’s tech giants could be caught up in strict regulations that could hurt their business. On the other hand, Chinese regulators ruled that the giants online they resorted to irregular prices for a number of products. It happened precisely during the sale of the Singles day, after receiving customer complaints online.
E-commerce companies like JD.com grow amid the crisis
In Asia, the Covid-19 pandemic has boosted the e-commerce business. For the Goliath of online retail such as Alibaba and JD.com, forced closures have been beneficial. Consumers switched from shopping in brick-and-mortar stores to buying products online, accelerating profits for e-commerce sites. Although its cloud computing business has also shown great promise, online retail has remained the main source of fortune since Jack Ma I believe Alibaba in 1999.
Luxury also lands on Alibaba
In order to seduce Chinese consumers of goods and luxury goods, the Italian firm Gucci, belonging to Grupo Dry, has sealed an agreement with Alibaba. You will take your select selection of items to Tmall Luxury Pavilion. It’s the platform online of Alibaba dedicated to international brands in the luxury and premium categories, in which Gucci will open two virtual stores. From her Gucci will offer the opportunity to purchase all its categories of fashion and beauty products. It will do so to the more than 700 million Chinese consumers of Tmall Luxury Pavilion.
The first of these digital showcases opened its doors precisely on December 21, with an offer that included items from the various fashion collections of Gucci. As for the second of these flagship stores virtual, it is expected that in its case it will be inaugurated during the next month of February 2021. In its case with an offer that will bring together all the products of the firm in the categories of beauty, makeup and perfumery. A portal that in this case will be in charge of managing the American company Coty, partner of Gucci in the development, under license, of its areas of beauty and cosmetic products.