Alibaba's Singles' Day preparation includes US$5.7 billion in aid to merchants

Alibaba Group Holding has earmarked at least 40 billion yuan (US$5.7 billion) worth of resources to help merchants on Taobao and Tmall during the Singles' Day shopping festival, as the e-commerce giant fights to protect its core business in an increasingly competitive market.

The largest shopping platforms owned by Alibaba, which also owns the South China Morning Post, plan to give out 30 billion yuan in consumer vouchers and dedicate resources worth as much as 10 billion yuan to boosting traffic, according to the latest announcement from Taobao and Tmall Group, the tech giant's domestic e-commerce unit.

The platforms also introduced new measures meant to reduce operational costs for merchants, which includes targeting the costs of goods returned by consumers and waiving various commission fees, according to the group.

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This marks one of the earliest steps taken by the Hangzhou-based tech conglomerate - which is now in a battle to stabilise its market share in the fiercely competitive domestic e-commerce market - to boost business during China's largest online shopping festival.

The Singles' Day shopping festival, initiated by Alibaba in 2009, is the world's largest online retail extravaganza. The annual bargain-hunting ritual, originally a 24-hour event named for its date November 11, or 11/11, has in recent years stretched into weeks, with sales kicking off in late October. Newer e-commerce players have more recently joined in, including ByteDance's Douyin and Pinduoduo, operated by Temu owner PDD Holdings.

Big expenditures to woo consumers leading into the shopping festival are nothing new. During last year's event, Taobao and Tmall Group said it committed an "unprecedented level of investment" to boost consumer engagement, including a "direct discount virtual venue" that shaved 15 per cent off prices, in addition to the usual coupons that can be used across different stores.

Alibaba has not offered details on the exact discounts it plans to offer this year, nor has it revealed the date it plans to start festival-related sales.

The company has been working on a slew of measures in recent months concentrated on improving user experience, including allowing Taobao merchants to accept Tencent Holdings' WeChat Pay and waiving the annual service fee for Tmall merchants.

It also loosened a controversial "refund only" policy that required merchants to give refunds on certain products without having buyers send them back. The new policy rewards sellers with good Taobao ratings by not proactively intervening.

JD.com, Alibaba's long-time e-commerce rival, has also announced some of its Singles' Day policies for this year. It said last week that it would kick off direct sales on October 17, with tens of billions of yuan worth of resources aimed at "bringing in new traffic" for merchants. Douyin and Pinduoduo have yet to make their own announcements.

The Singles' Day event will be closely watched by analysts and investors as a sign of China's consumer confidence amid a slowing economy that appears to be off track from achieving the national target of "around 5 per cent" growth this year.

During the 618 e-commerce event in May and June, China's second largest annual shopping festival, gross merchandise value (GMV) grew 13.6 per cent year on year but profit margins were likely squeezed, according to third-party data.

Alibaba said it recorded a positive year-on-year GMV growth for the event, but withheld exact numbers.

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