China’s two largest ecommerce sites Alibaba and Pinduoduo reported better than expected sales growth despite coronavirus difficulties in the first quarter, reported the Financial Times.
Both online marketplaces struggled with shortages of merchants and couriers as the virus lockdown trapped millions of Chinese at home in rural areas, far from the cities where they run online shops and ferry packages.
Hangzhou-based Alibaba increased revenues 22% to RMB 114.3 billion ($16.1 billion) but sales stagnated at its core Tmall and Taobao ecommerce marketplaces. Sales of clothing, accessories and home furnishings fell during the three-month period, as did some of its offerings for restaurants and shops.
Alibaba, China’s reining ecommerce giant with 726 million annual shoppers, faces rising competition from upstart Pinduoduo, with 628 million, and resurgent JD.com with 387 million. Chinese shoppers have flocked to Pinduoduo for subsidized deals. The company spent RMB 7.3 billion on sales and marketing fees, which include the subsidies, during the first quarter, or more than the RMB 6.5 billion it recorded in revenue. Its sales were up 44% from a year earlier.