“Brands have full autonomy to maximize their ROI in choosing their distribution platforms,” Alibaba said.
“The more than 100,000 brands who do business with Alibaba make the decision to be on our platform because they see Alibaba’s unique value proposition,” it continued. “With Alibaba, brands reach more than half a billion consumers, own the data and the analytics that provide robust consumer insights, and they get access to superior technologies that enable deep consumer engagement, both online and offline.”
The closures were first reported last week by the Southern Metropolis Daily newspaper, which said at least 44 brands had left JD.com last month because Alibaba was forcing brands to choose one platform or the other. The list includes some of China’s most popular apparel labels including JNBY, Peacebird, Heilan Home, Semir, and Jeanswest.
Several, including Peacebird and Heilan Home, have since announced strategic partnerships with Alibaba’s Tmall.
In a statement that did not specifically name Alibaba, JD.com confirmed that brands had been subject to pressure from a competitor.
“We believe strongly in open, fair and legal competition, but not everyone in the industry agrees,” it read. “Numerous brands have told us that another industry player is inappropriately using threats to attempt to force them to sell on only one site in China. We believe that brands and consumers should be able to sell and shop where they want without interference and will continue to support the ability of brands to choose to sell on however many sites they want.”
This is the not the first report of pressure tactics being used in the e-commerce space. In 2015, Uniqlo shut down its JD.com flagship after operating for just three months. It kept its Tmall store open. Its short duration, which Uniqlo explained as “a trial” sparked rumors, although Alibaba denied the allegations. JD.com said at the time the store had well exceeded the sales targets it had set with the brand.
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Fashion is a key sector for the two firms and is proving a bloody battlefield. With fast moving consumer goods and other product categories more or less at saturation point on the two platforms, fashion, and especially luxury fashion, remains the final frontier.
JD.com has formed key deals with the UK’s Farfetch and Thailand’s most powerful retail player, Central Group this year. Last month, Alibaba unveiled its luxury platform and has gotten serious about its anti-counterfeiting measures in an effort to ease brands’ concerns over fakes on its C2C market, Taobao.
Singles’ Day is fast approaching and the stakes are high. Started by Alibaba, the day falls every year on Nov. 11 and has evolved into the world’s biggest online shopping holiday. The widespread event has been adopted by other retailers, including JD.com.