Ahead of Singles Day, JD.com Cries Foul Against Alibaba

Alibaba may be bracing itself to shatter last year’s record $9.3 billion Singles Day, but it also may soon battle Chinese marketplace rival JD.com outside of cyberspace.

According to a report filed by Reuters, JD.com, the second-largest ecommerce marketplace in China, said it has sent a letter of complaint to a Chinese antitrust regulator and formally requested an investigation into rival Alibaba Group Holding.

The complaint concerns a State Administration for Industry and Commerce (SAIC) regulation that forbids ecommerce platforms from limiting or barring their merchants from participating in promotions on other platforms. The regulation came into effect on Oct. 1.

In a statement issued to the press, JD.com said that after “receiving reports from dozens of apparel retailers that a competitor is inappropriately pressuring them to pull out of JD.com’s Singles Day promotions, we have formally requested an SAIC investigation.

“Pressuring brands not to participate in our promotions limits choices for both consumers and brands, and would represent an obvious violation of China’s laws,” JD.com continued. “Our success in apparel and footwear—among our fastest growing categories—challenges our competitor’s market position, but brands should be able to choose which platforms and on what terms they operate, without undue interference.”

According to a report from CNBC on Friday, Zhang Mao, the head of the SAIC, said that ecommerce platforms should remember to compete with each other in a “sufficient, fair and orderly manner,” and not resort to “malicious marketing tactics.” This included not restricting rivals from doing business, state-media outlet Xinhua quoted Zhang as saying, the CNBC report read.

Alibaba did announce exclusive agreements with Robert Mondavi Wines and Macy’s, Inc. this past summer. However, Alibaba did not make reference to exclusivity in the October 22 deal it signed with Ocean Spray, three weeks after the SAIC regulation forbidding ecommerce platforms from limiting or barring their merchants from participating in promotions on other platforms went into effect.

Also, on August 12, Alibaba Group send a press release that stated “More than 20 brands including Decathlon and Timberland have signed exclusive partnership with Tmall.com, which will become the only third-party online sales platform for these brands.”

In an email send to Multichannel Merchant on August 12 asking for Alibaba Group’s definition of an exclusive agreement with Macy’s, spokesperson Candice Huang wrote:

“When merchants sign exclusive agreements with us, it could mean 1.) an exclusive store or 2.) exclusive products on Tmall/Tmall Global. In Macy’s case, they are launching an exclusive store on Tmall Global which means it will not be selling its products on any other third-party platforms in China (such as JD.com).

Of course, they can open their own online store (.cn) in China if they’d like to.”

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