Investing.com – Hangzhou-based Alibaba (NYSE:BABA) Group Holding (HK:9988) kicked off its annual Singles’ Day shopping festival on Wednesday, with sales already exceeding CNY372 billion, or $56.27 billion, ass of 12:30 AM ET (4:30 AM GMT). The order rate also hit a record peak of 583,000 per second, the company said.
Consumers are rushing to take advantage of the day of discounted products, with the COVID-19 pandemic largely under control in China. The company launched the event earlier than usual this year, with two primary discount periods taking place from Nov. 1 through Nov. 3 and on Nov. 11. Alibaba will also calculate gross merchandise volume over the full 11-day period starting Nov. 1 and not the usual Nov. 11, 24-hour period.
Other competitors, such as JD (NASDAQ:JD).Com, are also holding their own Single’s Day events.
The event comes just one week after Chinese regulators suspended Ant Group’s $37 billion IPO. Alibaba, which owns a third of Ant Group, lost almost $76 billion of its market value following the news.
Chinese tech shares, including those of Alibaba and JD.Com, tumbled after the Communist Party unveiled draft regulations to root out monopolistic practices in the internet industry on Tuesday. Alibaba’s Hong Kong shares dived 8.86% to HK$251 ($32.27) by 1:14 AM ET (5:14 AM GMT).
The State Administration for Market Regulation (SAMR), the country’s antitrust watchdog, is seeking feedback until the end of November on the regulations to curb anti-competitive behavior. These behaviors include collusion on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. The regulations could also require companies that operate a variable interest entity, used by virtually all major Chinese internet companies to attract foreign investment and lists overseas, to apply for specific operating approval.
“I literally gasped when I first read these guidelines. The timing, on the eve of Singles’ Day, the forcefulness and the resolve to remake the tech giants is startling,” Joint-Win Partners securities attorney John Dong told Bloomberg.
Other investors also gave grim forecasts for Chinese tech stocks.
“Beijing’s tightening regulations, including the antitrust laws, are a heavy blow to the technology giants. It’s an additional blow to the shares, when investors are rotating out of the sector into old-economy shares because of the vaccine boost,” with firms such as Tencent and Alibaba likely to face continuous downside pressure, CMB International Securities Ltd strategist Daniel So told Bloomberg.
China will additionally strengthen its anti-monopoly examinations of the fintech sector, Liang Tao, vice chairman of China Banking and Insurance Regulatory Commission, said earlier in the day.