Gossip unlikely to help Dangdang win ‘Double 11’ shopping festival

By Chi Jingyi Source:Global Times Published: 2019/10/24 21:28:58

File photo: VCG

Although a quarrel between Chinese online book seller dangdang.com's founder Li Guoqing and his wife Yu Yu has attracted lots of attention online, the company is not likely to become a winner during this year's "Double 11" shopping festival solely because of gossip, analysts said.

The gossip surrounding the divorce of the couple generated nearly 80 million views on Thursday on social media Sina Weibo alone. The two have accused each other of duplicity and chaotic private lives.

But analysts said even with all the attention the gossip has generated, the company won't win the upcoming "Double 11" shopping festival as the platform has failed to keep pace with other e-commerce platforms in innovation.

"Dangdang will attract attention from users for a period of time, but it remains uncertain how many users will stay on the platform and make orders," Mo Daiqing, senior analyst and director of the online retail department of China's E-Commerce Research Center, told the Global Times on Thursday.

"The argument between Li Guoqing and Yu Yu will affect the brand and reputation of the dangdang platform. There is still a certain distance between dangdang and other e-commerce platforms like Tmall and JD.com. It is difficult for dangdang to expand its user numbers and increase user engagement just with gossip," said Mo.

According to China's E-Commerce Research Center, over the past two years, Taobao has attracted more than 200 million new users, more than 70 percent of whom came from the lower-tier market. 

"The market in lower-tier cities has become the focus of e-commerce. This year during the Double 11 festival, online retailers such as Tmall, Suning Yigou and Gome will also focus on the lower-tier markets," said Mo.

The user scale of the market in lower-tier cities, generally third-tier cities or counties below that level, is 670 million, accounting for more than half of the market, according to the National Bureau of Statistics.

"When dangdang started selling books online, it was an innovation at that time. But people's reading habits and ways of acquiring knowledge have changed a lot with the innovation of technology," Tian Yun, vice director of the Beijing Economic Operation Association, told the Global Times on Thursday.

As of June 30, a total of 57 domestic e-commerce companies had been listed on stock exchanges, according to the Data Report of Chinese E-commerce Listed Companies, compiled by China's E-Commerce Research Center. Among all the listed companies, retail e-commerce companies account for 42.1 percent, followed by life service e-commerce companies, which account for 31.6 percent.

"Competition is fierce in the e-commerce industry, and dangdang ... has no obvious advantage in terms of strategy compared with Tmall or JD. Application scenarios and supply chains are what e-commerce is doing now, empowering merchants and consumers. Dangdang cannot keep pace with the latest trends and innovations," Mo added.

In addition to Tmall, JD, Pinduoduo, Suning and other large platforms, this year's "Double 11" has attracted more than 100 e-commerce platforms to participate, according to the statistics.

Transactions on "Double 11" reached 395.32 billion yuan ($56 billion) in 2018, up 33.8 percent from 2017. In 2018, the transaction volume of Tmall stood at 213.5 billion yuan, up 27 percent year-on-year.

"It is estimated that in 2019, Tmall's gross merchandise volume on 'Double 11' will approach the milestone of 300 billion yuan," said Mo.

Posted in: COMPANIES

blog comments powered by Disqus