Did fake discounts on Alibaba and Amazon drive Singles Day success?

Did fake discounts on Alibaba and Amazon drive Singles Day success?

A Chinese consumer organization claims that 17 % of discounts on China's Alibaba and JD.com and American Amazon.com during the world's largest online shopping event, Singles' Day, were fake.    

Misleading discounts

Singles' Day, which takes place on 11 November, is China's largest online sales event: it is bigger than Black Friday and Cyber Monday combined and therefore it is a very interesting (and lucrative) moment for platforms like Amazon, Alibaba and JD.com, which all post huge numbers on this particular day.

 

A Chinese consumer organization, CCA, now claims in a report that there were fake discounts on these platforms, through a price increase immediately before 11 November, to make it appear that the discounts were a lot higher than they actually were. 35 % of Amazon's products investigated turned out to be more expensive than when they were not in a sales period. For JD.com, it was 26.8 % and 19 % for Tmall (Alibaba's online platform).

 

Government involvement

CCA passed on the information to the government, who had been cracking down on this practice already. The American Securities and Exchange Commission was already researching 2015's Singles Day results, but the Chinese government also issued a warning prior to the event, warning companies not to falsely advertise.

 

Out of the three companies, Alibaba issued a statement, saying it had "strict measures in place to counter fake discounts" and that it punishes retailers on its platform that still do it. The other two companies did not provide any statement.