You are using an older browser version. Please use a supported version for the best MSN experience.

Inside China Tech: Alibaba leads record Singles’ Day sales as tech antitrust cloud gather

South China Morning Post logo South China Morning Post 13/11/2020 Bien Perez bien.perez@scmp.com
a close up of a stage: A giant screen shows the final tally of US$74.1 billion in gross merchandise volume for Alibaba Group Holding’s extended Singles’ Day campaign this month, as the e-commerce giant wrapped up its latest round of promotions on November 12. Photo: Xinhua © XINHUA A giant screen shows the final tally of US$74.1 billion in gross merchandise volume for Alibaba Group Holding’s extended Singles’ Day campaign this month, as the e-commerce giant wrapped up its latest round of promotions on November 12. Photo: Xinhua

Hello, this is Bien Perez from the South China Morning Post's Technology desk, with a wrap of our leading stories this week.

This November should have been a double-barrelled celebration for e-commerce giant Alibaba Group Holding, which aimed for another record-breaking Singles' Day sales campaign coupled with the successful initial public offering of financial technology affiliate Ant Group.

While Chinese regulators last week halted Ant's listing, setting back what was expected to be the world's biggest IPO, Alibaba delivered on Singles' Day with 498.2 billion (US$74.1 billion) in gross merchandise volume (GMV) from its 11-day promotional period. That topped last year's tally of 268.4 billion yuan during the company's 24-hour campaign on November 11.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

As the world's largest shopping festival, Singles' Day - also referred to as 11.11 - is known for its steep discounts on everything from daily necessities to luxury items and even flats.

Alibaba, parent company of the Post, also reported this week revenue of 155.1 billion yuan in its financial second quarter to September, up from 119 billion yuan a year ago, which was ahead of market analysts' estimates.

The revenue gain was made on the back of strong growth from Alibaba's core commerce operations, led by Tmall and Taobao Markeplace, as well its cloud computing business.

Alibaba evaluates response to shelved Ant IPO as quarterly revenue rises 30 per cent

Annual active consumers on Alibaba's vast China retail marketplaces reached 757 million, an increase of 15 million from the 12 month period ended June 30. Mobile monthly active users on these marketplaces reached 881 million in September, adding 7 million more consumers from the end of June.

The Hangzhou-based company's financial results, like China's annual Singles' Day shopping extravaganza, is seen as a bellwether of consumer spending in the world's most populous country and an important barometer of its economic health.

"Over the past 12 years, innovation has been at the heart of 11.11 and along the way it became a global consumer festival," said Jiang Fan, president of Taobao and Tmall, in a statement on Thursday. "We will continue to focus on developing our digital infrastructure in the service of empowering merchants of all sizes to find a path to success in the digital economy."

About 470 brands - including the likes of Apple, Huawei Technologies, Nike, Adidas, L'Oreal and Estee Lauder each achieved more than 100 million yuan in GMV on Alibaba's platforms during its Singles' Day campaign.

The United States was the top country selling to China by GMV, according to Alibaba. Other top-selling countries to China include: Australia, Canada, France, Germany, Italy, Japan, South Korea, New Zealand and Britain.

Hangzhou-based Alibaba's shares, which have risen more than 40 per cent since the start of the year, closed up 1.58 per cent to HK$257 on Friday.

Sale of Huawei's Honor brand could rank as world's biggest mobile phone deal

Speculation about Huawei Technologies potentially divesting its budget smartphone brand, Honor, intensified this week after a report said it was to be sold for 100 billion yuan (US$15.1 billion) to a Chinese consortium.

But information technology services firm Digital China Group, which a Reuters report identified as leading that acquisition, clarified on Wednesday that it has not reached any such deal with Huawei, the world's largest telecommunications equipment maker and a leading global smartphone vendor.

The size of the potential buyout, if indeed it does take place, would rank as the largest in the mobile phone industry.

It would surpass Google's US$12.5 billion deal to acquire Motorola Mobility in 2011 as well as the US$7.6 billion paid by software giant Microsoft Corp in 2013 to buy Nokia's phone business.

Google later sold Motorola Mobility to Lenovo Group for US$2.9 billion in 2014.

graphical user interface: Huawei Technologies' budget smartphone brand Honor has generated revenue of more than US$10 billion in the past five years, according to the company. Photo: Reuters © Provided by South China Morning Post Huawei Technologies' budget smartphone brand Honor has generated revenue of more than US$10 billion in the past five years, according to the company. Photo: Reuters

The all-cash sale of Honor will include almost all assets including brand, research and development capabilities, and supply chain management, according to the Reuters report, which cited people with knowledge of the matter.

Huawei had no comment on the reported divestment.

Founded in 2013, Honor has lived up to its name as the unsung hero that has helped Huawei overtake Apple and Samsung Electronics in sales at home and abroad by offering trendy smartphones, with an average selling price of between US$150 to US$220, to young consumers.

Tencent president says video games business not focus of antitrust move

When Chinese authorities this week released a draft antitrust guideline to rein in internet-based monopolies, it set off a market rout in Hong Kong that wiped out US$260 billion in value from major technology companies including Alibaba Group Holding and Tencent Holdings.

Shenzhen-based Tencent, which runs the world's largest video games business and China's biggest social network, on Thursday took the opportunity to share its initial thoughts about this development.

"Tencent's business, strategy and philosophy fit very well with the spirit of the regulatory framework," said company president Martin Lau Chi-ping in a conference call with analysts on Thursday. "As you can see, our platforms are open in nature and we work with a lot of partners."

"For games, we essentially have individual products rather than platforms, I think they are less of the (guidelines') focus," Lau said.

He also assured that Tencent will "work very constructively with the regulators to ensure our compliance", while indicating that the guideline's "intention is to prevent misconduct and also ensure long-term healthy growth" for the internet sector.

Replay Video

Hong Kong-listed Tencent on Thursday reported a net profit of 38.5 billion yuan (US$5.8 billion) in the third quarter, up from 20.4 billion yuan in the same period last year, boosted by strong growth in gaming and payment services. Revenue rose 29 per cent to 125.4 billion yuan, up from 97.2 billion yuan a year ago.

Revenue from Tencent's value-added services business segment, which comprise its video games and social networks, increased 38 per cent to 69.8 billion yuan, as online games grew the fastest - at 45 per cent - since the third quarter of 2017.

The company's share price, which has jumped more than 50 per cent since the start of the year, closed up 4.33 per cent to HK$602 on Friday.

And that is all for this week. Until next time.

More Articles from SCMP

Legal underpinnings of Beijing’s resolution on unseating lawmakers raises eyebrows among Hong Kong lawyers

Fate of protest by Hong Kong journalists’ groups hangs on approval from city’s No 2, after appeal against police ban

TikTok gets 15-day extension as US sale deadline is pushed to November 27

No hero’s welcome for lawmakers who quit

Joe Biden’s America needs to learn from the world, not vice versa

This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.

AdChoices
AdChoices
image beaconimage beaconimage beacon