Alibaba Tussles With Rivals Over ‘Double-Eleven’ Trademark
I’m not a big fan of “events” like the upcoming November 11 Singles’ Day, which are often created by companies in an attempt to boost sales. But in this case the latest reports on the upcoming date are providing a bit of controversy and entertainment, with word that e-commerce leader Alibaba (NYSE: BABA) is taking steps to protect trademark rights to a shopping event that it single-handedly created. In this case, media are reporting that Alibaba is saying that it owns the rights to the “Double Eleven” trademark, and is telling media to reject related advertisements from rivals like JD.com (Nasdaq: JD).
Even though I don’t particularly like Singles’ Day because it’s such a blatantly commercial event, I do have to credit Alibaba for making the date into a major occasion that has generated huge sales and become a media feeding frenzy over the last 2 years. Of course all of that effort is part of Alibaba’s strategy to promote its 2 main online e-commerce platforms, Tmall and Taobao, which are home to third-party merchants and individual sellers who love the extra sales bump they get from such promotions.
Alibaba has also spent big bucks promoting Singles’ Day. That fact was evident in the company’s prospectus for its recent blockbuster IPO, where it disclosed some of its marketing spending in last year’s fourth quarter during the most recent Singles’ Day promotion. The company reported nearly 10 billion yuan ($1.6 billion) in expenses in last year’s fourth quarter, nearly double the amount for the third quarter, and much of the big bump probably came from heavy promotion around Singles’ Day.
With that kind of investment to make Singles’ Day a success, perhaps it’s not surprising that Alibaba feels a certain attachment to the event and its closely associated symbol of Double-Eleven, denoting the 11th day of the 11th month of the year. That date itself is symbolically important, with all of those “1” digits emphasizing the importance of single status for millions of young shoppers who are the event’s target audience.
Now it seems that Alibaba is trying to exercise its rights to the Double-Eleven trademark, and has been sending letters to media telling them to reject advertisements from other retailers that want to use the moniker in their promotions. (English article; Chinese article) Exposure of Alibaba’s strong-arm tactics came from rival JD.com, which posted a copy of a letter from Tmall warning Chinese media not to publish advertisements from other companies using the Double-Eleven motif.
JD is obviously going public with this case to portray Alibaba as a mean-spirited company, even as Alibaba puts on a happy public face in its own latest Singles’ Day promotions. One report says Alibaba claims “Double-Eleven” is a registered trademark, and points out that the company has registered at least 6 trademarks associated with the date with China’s State Administration of Industry and Commerce.
In posting the Tmall letter, JD.com added its own view that Alibaba’s move was counter to “the open spirit of the Internet and principles of fair competition.” It’s a bit unclear if many media have heeded Alibaba’s warnings, and I do suspect that most will probably go ahead and accepting any advertisements using the Double-Eleven theme. Alibaba could theoretically try to sue such media and the retailers that place those ads, which would provide some interesting courtroom entertainment.
I can certainly understand Alibaba’s desire to protect its rights to Double-Eleven, since it has invested millions and perhaps even billions of dollars to make the event a success. The company itself has been one of the biggest beneficiaries of that success, and feels others shouldn’t be allowed to ride on its coattails. I might remind Alibaba that it has already been hugely rewarded for its efforts with a massively successful IPO last month. I might also suggest that it quietly consider backing down from its Double-Eleven threats, or risk a potential negative backlash that could make it lose some of its luster in the eyes of both consumers and investors.
Bottom line: Alibaba’s behind-the-scenes moves to protect its Singles’ Day trademarks could backfire if it isn’t careful, creating a negative public backlash dampening its image to both consumers and investors.