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Alibaba changes tack ahead of Singles’ Day shopping event

Written by Nikkei Asia Published on   4 mins read

E-commerce giant toes party line as it hopes for Beijing’s forgiveness.

China’s biggest annual online shopping event on November 11, known as Singles’ Day, is just around the corner, but there is something different about this year. E-commerce giant Alibaba Group, which managed to rack up record sales of RMB 498.2 billion (USD 77.8 billion) last year despite the pandemic, is focusing on the environment.

As usual, Alibaba has been drumming up consumer appetite with a massive promotional campaign, but a kickoff event on October 20 in Shanghai showed a major change in focus. Instead of just encouraging unbridled consumerism, the online mall operator says it is urging its vendors to expand their range of environmentally friendly products and shoppers to recycle old home appliances and cut wasteful consumption. It is an about-face from previous campaigns.

Chinese President Xi Jinping told the UN General Assembly in 2020 that China aims to achieve carbon neutrality by 2060. And Alibaba has heard the message loud and clear, as it steps up efforts to toe the party line and help the country achieve that low-carbon status.

The second theme during the launch event was social welfare. Alibaba made a pledge to support those in need in society. It says it will make donations based on sales revenue and is asking vendors to do the same. The company will also raise funds from consumers on its website and introduce a system that automatically donates part of the proceeds from certain items.

Alibaba racked up record sales during Singles’ Day last year, despite the pandemic. Photo by KrASIA.

Behind Alibaba’s sudden burst of social consciousness is Xi’s campaign for “common prosperity.” Beijing says it wants to distribute wealth more equitably not just through remuneration, but also through taxation and donations to bridge income gaps.

Alibaba, which earns enormous revenues, is under increasing pressure to show a willingness to contribute to the cause. The company announced in September that it will invest RMB 100 billion by 2025 to help gig workers and alleviate poverty.

The government’s tighter restrictions on the internet have certainly given Alibaba reason to pay attention as it faces an existential crisis. Ever since its financial unit Ant Group gave up a planned listing under pressure from local financial authorities in November last year, Alibaba has been treading carefully.

It is believed that the company’s troubles were in large part due to a speech by its founder Jack Ma, made unimaginably wealthy by Alibaba, to an audience that included government officials the month before in which he said “good innovation is not afraid of regulation.”

Ma had enjoyed public support with his candid, some might say foolhardy, remarks that helped cement his image as a charismatic business leader both at home and abroad. He had long become influential globally, meeting with then-US President-elect Donald Trump in 2017 and promising to create 1 million jobs in the US. As a “face of China,” he traveled across the world.

But this life of privilege was upturned after the speech, which was thought to have offended the Xi leadership. Ma disappeared from public view, as some media outlets speculated that Chinese authorities had restricted his travel abroad.

Since Ant Group was forced to cancel its IPO in November last year, Alibaba founder Jack Ma (left in the photo next to Tencent founder Pony Ma) has disappeared from public eye. Photo from Tuchong.com

Alibaba was driven into a corner along with its founder. Since the cancellation of the IPO, some of Ant Group’s operations have been suspended or reorganized under the supervision of authorities. Alibaba itself was slapped with the heaviest-ever fines over antitrust law violations in April. Chairman and CEO Daniel Zhang never fails to express the company’s full support for government policies whenever he speaks in public.

Given this backdrop, it has become necessary for Alibaba to be seen on Singles’ Day, when its already dominant platform is amplified further, to be on the right side of government policies. Rather than focusing on its sales on the biggest shopping day of the year, the company and its management know Alibaba has to instead show humility and obedience to the party. The only hope it has of regaining government trust is to publicize its contribution to society.

As Xi says over and over again, “North, south, east and west—the party leads everything.”

A day before the kickoff event, Hong Kong media reported that Ma had departed for Spain for an agriculture study tour. There are speculations that this overseas trip means government pressure on Alibaba is easing.

But there is little doubt that the commercial behemoth has been put in its place and its sharp-tongued, charismatic business leader has absorbed Xi’s message.

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.


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