This article first appeared in The Edge Financial Daily, on November 6, 2015.

SHANGHAI: China’s commerce regulator will investigate accusations by JD.com Inc that rival Alibaba Group Holding Ltd is unfairly pressuring merchants to shun competing platforms, JD said, ratcheting up a battle between the nation’s two biggest online retailers.

The State Administration for Industry and Commerce has accepted JD’s request to look into Alibaba’s attempts to lock in merchants ahead of the crucial “Singles’ Day” promotion next week, JD said in an online post yesterday. China’s second-largest web retailer has accused its larger rival of forcing merchants to choose between the two, which it said hampers competition and violates regulations.

The agency has directed its branch in the eastern province of Zhejiang, where Alibaba is based, to investigate further and handle the complaint as needed, JD said.

Singles’ Day on Nov 11 has morphed into China’s biggest excuse to shop, when e-commerce operators flood the Internet with bargains to drive a shopping binge that dwarfs the US Black Friday and Cyber Monday events. It has become a crucial contest between the country’s biggest e-commerce companies.

Both firms expend major resources and effort to secure merchant partners for the promotion. Alibaba alone has invested US$4.6 billion (RM19.7 billion) for a stake in a brick-and-mortar domestic retailer, in part to challenge JD’s strength in consumer electronics.  

Alibaba, which started Singles’ Day in 2009, began replicating its success overseas last year, seeing sales spikes led by Russia. Last year more than 57.1 billion yuan (RM38.7 billion) of transactions were conducted through its platform during the promotion, more than the combined total of all US merchants on Cyber Monday. — Bloomberg