China Watchdog Tries to Douse Flames of Alibaba, JD.com Stand-Off

A Chinese regulator has tried to cool a brewing war of words between Alibaba Group Holding Ltd and JD.com, the country's top two e-commerce firms, after they accused each other of foul play.

The intervention comes as the long-time rivals jostle to win over customers ahead of China's biggest shopping day of the year, Nov. 11 "Singles' Day", also known as "Double Eleven". The stakes are high: Last year, Alibaba logged $9.3 billion in transactions on its platforms.

Zhang Mao, head of the State Administration for Industry and Commerce (SAIC), urged players in China's booming online shopping sector to safeguard market order and fair competition. He called on them to "not use malicious marketing methods to engage in competition" in Nov. 11 sales that could be even bigger this year.

"With Double Eleven approaching, JD and Alibaba have clashed many times. There is gunsmoke everywhere on the e-commerce battlefield," news agency Xinhua late on Thursday quoted Zhang as saying.

JD.com, China's no.2 e-commerce firm, shot the first barb in the latest bout on Tuesday, lodging a complaint with the SAIC against its bigger rival for "forcing merchants" to exclusively choose its site for promotional activities - something Alibaba denies. JD.com then said on Thursday the SAIC had formally accepted the complaint.

Under a regulation that took effect on October 1, e-commerce platforms are forbidden from limiting or barring their merchants from participating in promotions on other platforms.

Alibaba fired back that its smaller rival was "panicking".

An Alibaba spokesman added JD.com had itself been censured by authorities multiple times, while an Alibaba-linked microblog said JD.com's allegation was like "a chicken accusing a duck of monopolizing the surface of the lake".

In the next salvo, JD.com on Friday said it had filed a separate lawsuit against Alibaba's Tmall shopping site for what it said was false advertising over its same-day delivery capabilities.

Alibaba declined to comment specifically on the suit. A spokesman referred Reuters to a previous statement: "We win merchants and customers because we offer them a superior shopping experience on our marketplaces."

Calls to the Zhejiang provincial branch of the SAIC, where JD.com filed its complaint on Tuesday, went unanswered. An official in the information office at the Beijing headquarters of the SAIC declined to comment.

© Thomson Reuters 2015