Alibaba Fails To Boost The Chinese Retail Market

Alibaba's Singles Day results have not been able to boost China's retail market for the second largest economy.

Alibaba has failed to boost the Chinese retail market. It performed much more than expected with its record 91 billion Yuan in online sales on the shopping festival Singles’ Day at a time when the second largest economy is bleak. Experts warned that the organization’s success doesn’t necessarily indicate about the growth of the country’s retail market, and its economic slump continues to act as biggest concern for the industry in the long term.

Alibaba news exclaimed that it recorded transactions worth 91.2 billion Yuan on November 11, growing by 60% from the same time in 2014, but venture capitalists could not wait to dispose the shares, as the stock retreated for three consecutive days in New York by up to 7%, as compared to a 3% decline in the Dow Industrial Average same time. Even the company’s competitors in the online trading sector were also troubled.

The Chinese e-commerce giant closed at $78.65 in New York on Friday previous week. In 2015, its shares tumbled by 27%. Rival JD.com also declined by more than 5% in the 3-day period till Friday. Online discount retailing service provider, Vipshop Holdings, declined by 27% on Friday to its least degree in 18 months, as it decreased its sales revenue guidance for the third quarter.

Alibabawholesale informed that the American hedge fund, Appaloosa Management LP, led by billionaire venture capitalist, David Tapper, has sold its 1.36 million shares in the Chinese trading giant, since June, an American regulatory filing stated on Friday. Experts stated that the shopping event’s sales might stimulate Alibaba in a short term for the enterprise and other electronic trading enterprises, but it did not address the concerns of investors worried about its future.

Alibaba news today affirmed that Partners Capital International’s CEO Ronald Wan stated, “The Singles’ Day sales numbers are very robust, and Chinese consumers’ shopping power seems crazy. But we need to carefully study whether consumers are just pulling from prior and future months to spend on that day, and if brick-and-mortar stores are suffering from more sluggish sales, with the consumer spending on the whole remaining relatively weak.”

Actually, country’s departmental stores have reported that they have suffered from a terrible decrease in sales revenue in the third quarter. Amongst the 26 registered Chinese departmental stores that have recorded third quarter results as of October, about 60% posted a yearly retreat in profit, with several suffering from net losses whereas citing “weakening macro conditions”, statistical records from Winds revealed.

Alibaba Breaking news reported that Sinolink Securities’ Shanghai-based expert Zhao Haichun stated, “The department store operators experienced a significant slowdown in sales, due to slowing consumer spending and economic growth and intensified competition from e-commerce players.”