Alibaba’s annual 11/11 shopping event racked up a record 540.3 billion yuan ($84.54 billion) in gross merchandise volume this year, up from last year’s revenue of 498.2 billion yuan. However, GMV growth was only 8.5% YoY, the slowest since Alibaba started the event back in 2009. This is a major stall from the 26% jump Alibaba posted last year, compared to 2019.
While profits are skyrocketing, slower growth raises much concern from stakeholders. Citi analysts said that while this year's numbers were worse than they predicted, "it was not entirely unexpected" given growing competition, a slowing economy and the overall pizzazz the event once held is dwindling.
Smaller rival JD.com actually fared better, recording 349.1 billion yuan ($54.6 billion) in sales by GMV. That was up 28.6% from a year ago, but still a bit slower than the 33% growth rate it hit last year.
The stunted growth comes as the Chinese government's quest to impose tough new rules on the country's internet giants. After years of virtually no oversight by Beijing, officials have been enforcing regulations to ensure that the technology industry competes fairly and contributes more to society.
Alibaba found itself getting the most press in the midst of the crackdown as it paid a record $2.8 billion (with a B) fine after a probe determined it had abused its market position for years. The company also said it would change the way it conducted its business. We’ll see if these changes affect the numbers even more significantly next year.
In an effort to improve dwindling customer trust and retention, Wish, one of the world’s largest mobile ecommerce platforms, introduced its Wish Standards program. The program entails a series of quality assurance standards like shipping experience, product quality, customer reviews, refund rates and compliance with Wish's rules.
Merchants who qualify for the program will be enticed by commission discounts, expedited payment terms and much wider exposure for their products within the app. They will also carry a ‘Premier Merchant Badge’ that will feature prominently across their product listings and merchant store.
During Wish’s Global Merchant Summit, they also announced plans to focus on discovery commerce in order to attract a more fickle generation of buyers. They introduced a homepage redesign featuring rich banners, deals, brands and trending products. They also have plans to introduce shoppable video over the coming months, further blurring the lines between social and commerce. As we’ve discussed thousands of times, shoppable video commerce is the near future of eCommerce.
The rollout of the Wish Standards program comes at a crucial time when other online retailers have been steadily rolling out their own verification efforts. Unless you’ve been living under a rock, it’s no secret that Amazon has had their own fair share of privacy/counterfeit concerns. The eCommerce behemoth has recently teamed up with brands like Salvatore Ferragamo, Valentino and KF Beauty to sue alleged counterfeiters and introduce various seller authentication programs.
Facebook recently announced that it’s rolling out some brand new shopping features. The company is launching Shops in Groups, product recommendations and a test of Live Shopping for Creators, to name a few.
Shops in Groups allows admins of Facebook groups to set up their very own online store on their associated Facebook Page. It’s up to the admins where this money goes. Some can opt for it to go to charity, which could get sketchy considering that not all Facebook groups aim to donate to nonprofits.
Still, Yulie Kwon Kim, Meta’s vice president of Product Management, pointed out that many group admins are volunteers, and these shops could offer them a revenue stream for their work.
Facebook also noted that users typically ask for product recommendations in groups, like dog food suggestions in pet-centered groups. Now, if a user mentions a product that is listed in a Facebook shop, they can tag it and embed it into their comment. Top product recommendations from groups will appear within users' news feeds.
If there’s a will to make something shoppable in this day and age, there’s a way. The platform actually has had Live Shopping for years, but as brand deals with influencers and general creators have become ubiquitous, the app has begun testing a feature that would make these collaborations appear more seamless, and less clunky. Now, instead of an influencer directing fans to another page to watch them sell a product, creators and brands can cross-stream on both of their pages.
It makes sense for the company to be adding new sources of revenue just in time for the holidays, but more importantly this could pave the way for even more group-related monetization down the line.
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