HONG KONG – China’s two biggest e-commerce companies are fighting like cats and dogs. After the culmination of a frenzied Singles’ Day sale on Nov. 11, the world’s largest shopping event, each is calling foul on how the other calculates gross merchandise value.
Following the release of JD.com numbers, an Alibaba executive contended that JD.com’s sale period ran from Nov. 1 to 11. However, neither of the companies’ Double Eleven sales, as the shopping festival is also known, are confined in practical terms to just what occurs over 24 hours.
“If JD wants, they can simply include the whole year’s volume of orders in the ‘Singles’ Day’ GMV,” Tiger Wang, the chairman of Alibaba’s public affairs committee, said in a video interview with the group-owned publication Qianniu. “Making yourself happy is not a bad thing. This way, a single day’s transaction volume on Tmall definitely won’t be able to win against a year on JD.com.”
He suggested JD.com’s total was down to creative accounting. “Actually for JD to surpass Tmall is a very simple thing: find a good accountant to solve it,” he said.
JD.com responded in kind.
“Every time they laugh at us, I know we’ve just taken market share. The more we close in on them, the more nervous laughter we hear,” said Josh Gartner, JD.com’s vice president of international corporate affairs.
Alibaba defines its Singles’ Day shopping festival GMV as “the total value of orders settled through Alipay on Alibaba’s China retail marketplaces and AliExpress within a 24-hour period on Nov. 11.”
However, its down payment system allows people to shop Alibaba merchants’ pre-sales in the days leading up to Nov. 11, which this year started extra early on Oct. 20.
Customers can first pay a deposit, and the transaction is eventually settled on Nov. 11. For example, if a customer pays a 100 renminbi deposit on Oct. 30 for a 1,000 renminbi item, the order is completed on Nov. 11 and the entire 1,000 renminbi amount goes towards the company’s Singles’ Day number.
The antagonistic relationship between the two Chinese e-commerce giants has surfaced on several occasions, including long-standing accusations that Alibaba pressures brands to choose between them and JD.com, which Alibaba denies. It’s something even represented symbolically in their mascots: Tmall uses a cat while JD.com has Joy the dog.
How closely matched are the two?
A survey from Fung Global Retail & Technology found that among Chinese online shoppers, 99 percent were familiar with Alibaba platforms Taobao and Tmall, with 92 percent purchasing from the two web sites in the past year. However, JD.com was not far off, both in terms of familiarity and purchases in the past 12 months, at 87 percent and 69 percent, respectively.
Both companies cited a smoother delivery process as the reason to allow people to order earlier, a concern that seems to be legitimate.
“About four in 10 surveyed shoppers said they experienced issues during Singles’ Day last year,” Fung Global Retail & Technology said. “The top issue mentioned was logistics related, with 32 percent of Singles’ Day shoppers cancelling their order because of a long waiting time.”
As attention-grabbing as these headline GMV numbers may be, experts are starting to focus less on the top line.
“Since Alibaba and JD.com calculate their GMV differently there will always be a discrepancy when comparing values,” said James Hebbert, U.K. managing director of Chinese digital branding agency Hylink. “The value of GMV, which doesn’t always accurately reflect revenue or profit, has perhaps served its purpose as being an attention-grabbing headline to show the world the impressive sales stats. Now the e-commerce market is maturing in China it’s time to focus on more pertinent metrics such as the number of customers and customer satisfaction.”