TENCENT HOLDINGS ADR (OTCMKTS:TCEHY) and JD.Com Inc (ADR)(NASDAQ:JD) commenced ‘Brand-Commerce’ platform that will allow branded merchants to better reach customers. The two firms will form a team and share their resources to boost the service. A growing association between Tencent and JD.com could seriously challenge Alibaba Group Holding Ltd (NYSE:BABA)’s dominance of e-commerce in the coming years, as the peers plans to use the imminent November 11 Singles Day to demonstrate their prowess.
The objective
This year’s Singles Day falling on November 11 is shaping up as a revolutionary courtship of online shoppers by the country’s two e-commerce pioneers, as each seeks for supremacy on a day that has become the busiest day for online buying. After leading firm Alibaba reported its plans to attract shoppers, rival firm JD.com has revealed its own counter plan that aims to attract China’s singles or hordes in a partnership drawing on its growing bonds with leading SNS operator Tencent.
The numbers
The stakes in this competition are huge. In 2014, Alibaba recorded 278 million orders around the promotion launched on the November 11 Singles Day holiday, which marks the day of singledom due to its representation as four 1′s, or 11-11. JD didn’t disclose a sales value for its orders in 2014, but confirmed that it recorded 14 million orders. The expected valuation are still short of the over $50 billion in projected sales during the Black Friday period that comes after Thanksgiving in the U.S.
However, the estimates are much higher than the projected $2 billion in spending during the Cyber Monday festival in the U.S. that comes on following Monday after Thanksgiving. This festival is closet event to China’s Singles Day. JD.com has been a distant second firm to Alibaba in the industry of e-commerce, but has been increasing market share following its equity alliance with Tencent.
TENCENT HOLDINGS ADR (OTCMKTS:TCEHY) broke above the highs of the previous two days and finished the last trading session with a gain of 0.97%. The volume of the day at 2.1 million was much higher than the daily average of 680,000, reflecting the presence of buyers even at the higher levels. On the other hand, with the price going up for more than 3 weeks, the rally definitely looks a bit overstretched. The stock is getting closer to the long term supply zone in the band of $19.50-$20.25 and that may throw a stiff challenge to the bulls.
