When Alibaba held its eleventh Singles’ Day shopping festival in 2019, it celebrated with a star-studded performance by Taylor Swift in Shanghai. Five years later, China’s leading e-commerce giant has moved away from glitzy parties and price wars, redirecting resources towards supporting merchants and consumers amid economic shifts.
With pressures from COVID-19 and emerging competitors like Pinduoduo and ByteDance’s Douyin, Alibaba is rethinking its approach. Instead of competing on ultra-low prices, Alibaba now focuses on its high-spending 88VIP members, who prioritize quality over discounts. Jacob Cooke, CEO of WPIC Marketing + Technologies, explains, “They’re targeting high-end big spenders rather than sheer volume, which sets Alibaba apart.”
This year, 60% more 88VIP members participated in Singles’ Day, with average spending up by 30% from last year. For merchants like Dylan Zhang, operator of the WHC fish oil brand on Tmall Global, the shift away from price-cutting has been a relief. “This year, there’s less emphasis on lowest prices, allowing us to focus on quality,” Zhang shared.
In August, Alibaba eased a “refund without return” policy, which many merchants felt was abused. Li Yuan, who sells shoes on Taobao, noted the policy shift as a significant improvement, reducing automatic returns and helping merchants regain control.
In response to calls from the government to curb “involution,” a term for intense competition with limited growth opportunities, Alibaba has given sellers more autonomy. This is evident in the recent introduction of Tuihuobao, a logistics service that reduces return costs, and upgrades to AI marketing tools. These tools are now used by over a million merchants, with Quanzhantui, a paid digital marketing tool, helping 250,000 sellers on Singles’ Day alone.
While other e-commerce platforms like Pinduoduo have taken similar measures by removing counterfeit sellers, Alibaba’s focus on quality aims to balance consumer trust and merchant support. As competition in China’s domestic e-commerce sector eases, cross-border opportunities have become a focus. In July, Alibaba introduced global free shipping on select Taobao and Tmall products, expanding its reach overseas as rivals Shein and Temu gain ground.
Despite these positive changes, Alibaba faces challenges in monetizing merchant growth. This year, it moved from a flat technology fee to a percentage of gross merchandise value (GMV) for Tmall merchants, which could help align revenue with sales growth. As Singles’ Day concludes on November 11, analysts will watch closely to assess the impact of Alibaba’s evolving strategies on China’s e-commerce landscape and consumer spending recovery.
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