Financial News

  • 27 August 2014, 13:11

Alibaba Shoppers Can Net New Home Discounts

China's extraordinary e-commerce boom has hit new heights, with Alibaba shoppers now able to claim massive discounts on new homes to help boost sales.

The cross-promotion between housing developer China Vanke - the country's biggest - and Alibaba's Taobao Marketplace is worth the most to the biggest spenders.

At the top end of the offer, people who spent more than two million yuan (£196,000) on Taobao over the past year are able to net two million yuan off selected properties at 23 Vanke developments across China.

The lowest possible discount was 50,000 yuan (£5,000) and, according to China Business Daily, there had been more than 140 people taking advantage of the offer in its first few hours.

The promotion was seen as a way of not only boosting sales for both groups but also demonstrating the potential for their combined financial clout to negate the effects of the country's economic slowdown.

A crackdown on lending, amid concerns over a consumer debt burden, has forced China's property firms to cut their prices.

Sales fell by more than 10% in the first seven months of the year and prices have fallen steadily since May - accelerating last month.

A glut of new properties, particularly apartments, are reportedly standing empty - a situation which has prompted many developers to slash prices further in the hope of securing occupants.

The most expensive of the 23 developments offers villas at 60,000 yuan (£6,000) per square metre.

They are located on the outskirts of the city of Hangzhou, a famous tourist city in eastern China, and offer access to a golf course and a membership-only club.

But Chinese consumers took to the country's equivalent of Twitter, Weibo, to voice doubts about the promotion.

One user said: "How many people do you think can spend as much as two million yuan on Taoabo?

"And do you really think these people would lay their eyes on houses worth this little?

"Rich people's game, we don't understand".

Another asked "Does it mean the property bubble is going to burst"? 

Vanke may have used the success of car sales through Taobao as evidence that selling homes may prove popular too.

China's Geely, the owner of London's Black Cab, and VW have been among the companies reporting strong demand through their official online shopping stores in Taobao.

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