You must be aware that China is hit by one of the worst epidemics of all time which is the Coronavirus. Now, the problem with this virus outbreak is that it has also impacted the economy of China. Since the country is in a “state of semi-quarantine”, most of the people are staying indoors and are out of jobs. This means that their spending on products has decreased massively. And even though we have reported that the e-commerce are increasing, those are low-ticket products such as sanitizers and napkins and items that are needed for daily usage.
For this reason, e-commerce companies in China are hurting badly and China’s biggest e-commerce firm has to do something about it. For this reason, Alibaba has now decided to organize an online shopping festival which it hopes will boost sales in the country. Also, this shopping festival will be funded for $1billion yuan in subsidy by the firm just to off-set the impact of coronavirus and keep things moving.
Now, we know that this is one of the biggest risks that Alibaba is going to take since a long time. Because while we know that the discounts during online shopping festivals will make them buy the items, it is still left to see if the items will be sold in numbers are high as the last shopping festival by Alibaba which was the 11.11 Singles’ day sale which recorded the highest purchases at 268 billion yuan.
This is even higher than the period in the US between Thanksgiving and Cyber Monday which is believed to be a great time for buyers to score on discounts and sales. It is worth noting that Alibaba’s 11.11 sale runs for only 24 hours whereas the US’ Black Friday sales have a five-day period which was started even earlier in 2019.