Alibaba Group Holding Limited (BABA) shares fell 0.33% on day of its biggest Singles Day sale of the year. But the significant news about record sales was overshadowed by the reform in China on the eve of antitrust legislation, which could have a negative effect on e-Commerce leaders.
Chinese giant Alibaba (BABA) shares dropped sharply on Tuesday following the announcement in China of new antitrust regulations that could reduce the company’s market share in favor of smaller rivals.
Alibaba is hosting its famous single day sale this year from 1 to 12 November, which exceeds the combined Black Friday and cyber Monday in the United States. Alibaba boasts a different sales record every year, and this year is no exception.
Alibaba said orders hit $75 billion on its e-commerce sites, indicating a rise in consumer spending in China in the midst of the recovery from the COVID-19 pandemic crisis. The sum is not final, however, as the sale has not been completed yet.
Alibaba’s efforts to attract a large number of imported products have also boosted growth, as somer people do not go shopping abroad, as well as expanding the cheaper segment’s range of sales.
For the first time, over 2,600 new international brands have been introduced to China by the TMall trading site, run by Alibaba. The Taobao Tejia discount software from Alibaba targets customers in poorer towns and competes with Pinduoduo (PDD)
JD.com, Alibaba’s largest rival, said that the number of transactions on its website surpassed $30 billion in the same timeframe starting on November 1.
Tech giants in China face tighter antitrust regulations
China’s latest antitrust regulations, revealed on Tuesday, cover areas for target markets, such as pricing, payment methods and data use.
In particular, the rules forbid the use of such anti-competitive practices by e-Commerce platforms, where businesses force sellers to choose between two platforms but sellers are forced to sign contracts that allow them to sell on one platform only.
Both Alibaba’s electronic platforms (Taobao, Tmall) and rival Tencent’s, JD.Com, Meituan and Pinduoduo, will be subject to the rules.
Alibaba shares, which have risen by 25.25 percent since the start of the year, have fallen by 13.97 percent over the past month, partially because of government regulatory issues and also due to the suspension of the ANT Group’s IPO.