Alibaba is launching an online shopping festival in an attempt to boost sales after a drop-off in consumer spending due to the coronavirus outbreak.
The Chinese ecommerce behemoth said yesterday it will offer 1 billion yuan’s (£111 million) worth of spending subsidies for the as yet unnamed festival, Reuters reported.
Alibaba, which accounts for around two thirds of all goods bought online in China, has seen shares drop around seven per cent since the start of the virus outbreak, mirroring a similar dive in the wider Asian financial markets.
Last month its chief executive Daniel Zhang warned that the outbreak of the deadly coronavirus, now officially named ‘COVID-19’, has severely impacted its operations and sales figures.
He warned that Alibaba’s retail platforms including Tmall and Taoboa, which account for well over half of its total revenues, were set to shrink in the coming quarter.
This will mark a dramatic turnaround in its retail operations which have seen annual growth of more than 30 per cent for years.
Despite much of China still being in semi-lockdown in attempts to contain the virus, retailers like Alibaba and JD.com are seeing a dramatic boost in ecommerce sales, but are struggling to meet demand due to staff shortages.
Unlike its larger competitors JD.com operates its logistics network entirely in-house, a trait that it says will enable it to return to operations following the extended holiday period in China far quicker.
Its 150,000 logistics employees have “become a lifeline for millions of existing and new customers” during the continued impact of the coronavirus outbreak, seeing its user base grow significantly this quarter.