China’s consumers are the driving force behind the economic growth of the country in 2019. Alibaba is one of the fastest growers and is the undisputed number one in online commerce. The distance to the competitors is immense.
One in two orders is placed on Alibaba
Originally meant as an event to show its rivals what it could do, Singles Day has become a very big success. In 2019, JD.com’s 618 shopping festival was a huge success for Alibaba. During the period from early June to the 18th of the month, the company offered countless products, from baby rattles to washing machines, with high discounts, attracting millions of customers to its platforms. How much exactly the platform redeemed is not known, the group did not specify. However, industry observers estimate that the market leader has generated about as much revenue as its toughest rival (and the inventor of the 618 festival) JD.com.
In this case, somewhere in the range of $29 billion should have flowed through the books. In any case, JD.com reported $29.3 billion in record revenues for the 618 Festival, an increase of 26% over the previous year. The fact that the biggest Chinese online platform hijacked the 618 festival this year as it were – in previous years the efforts seemed more manageable – fits into the bigger picture. China’s e-commerce is growing strongly and Alibaba is using its enormous market power to cement leadership.
With its two e-commerce platforms, Tmall and Taobao, Alibaba controls more than half of all online commerce in China. In a study, the Chinese E-commerce Research Centre for Alibaba has a market share of e-commerce (H1 2019) of 55%, although the value is a slight decline of 3 percentage points compared to 2018. Alibaba is profitable, while the competitors in a more and more fierce market environment, pile up losses.