Alibaba Group Holding (NYSE:BABA) eyes double-digit sales growth for its Singles' Day campaign in Hong Kong, thanks to a new promotion designed to waive delivery fees for Taobao users in the city.
The Chinese e-commerce juggernaut launched a 1 billion yuan ($142 million) initiative on October 1 to waive delivery charges on specific orders over 99 yuan. The update also coincides with China's recent fiscal stimulus announcements to boost the economy.
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Taobao, Alibaba's leading online shopping platform in mainland China, has already seen significant year-on-year growth in both gross merchandise value (GMV) and order volume in Hong Kong, the South China Morning Post reports.
David Ye Jianqiu, general manager of Tmall Taobao World, noted that user feedback on the free shipping initiative has been overwhelmingly positive. He expressed confidence that Taobao will achieve double-digit year-on-year GMV growth during this year's Singles' Day event in Hong Kong.
The company focuses on markets outside mainland China, as the intense competition in the domestic market prompted a price war.
Taobao and Tmall remained invested in multiple initiatives to boost value. Beginning in September, Alibaba shared plans to introduce a 0.6% software service fee on confirmed transactions for vendors using its Tmall and Taobao platforms to boost Alibaba's core merchant revenue significantly.
Jefferies Financial Group analysts highlighted that Alibaba currently generates most of its Taobao and Tmall revenue from customer management fees, which merchants pay to advertise and customize their product offerings.
Taobao and Tmall Group (TTG) established a new "digital technology" company with a registered capital of 10 million yuan ($1.4 million). The company is focused on importing and exporting goods, selling food, daily groceries, outdoor products, and household appliances, and offering technology services like software development and tech transfer.
Alibaba's fiscal first-quarter topline grew by 4% to $33.47 billion, missing the consensus estimate of $34.81 billion. Taobao and Tmall Group revenue declined by 1% to $15.60 billion.
Price Action: BABA stock is up 2.18% at $102.26 at the last check on Friday.
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