Alibaba, JD set new records to rack up record $115 billion of sales on Singles Day as regulations loom

But it was also overshadowed by huge stock price falls for both Alibaba and JD.com which came after Chinese regulators released draft rules that, for the first time, defines what constitutes anti-competitive behavior. Investors fear that China’s technology giants could get caught up in a tough regulations which could damage their business.

Alibaba’s Hong Kong-listed stock was around 3% higher on Thursday while JD.com’s Hong Kong-listed shares were up over 7%, showing signs of a rebound.

For both Alibaba and JD.com, foreign brands were a big focus. Chinese shoppers who would usually be going abroad to buy foreign products, were expected to purchase them in China, due to travel restrictions, Alvin Liu, the president of Alibaba’s Tmall import and export business, told CNBC in an interview last week.

Alibaba said 250,000 brands participated in the Singles Day event this year of which 31,000 were from overseas. The United States was the top country selling to China by GMV, Alibaba said.

Michael Evans, president of Alibaba, said over $5 billion of Alibaba’s total $74.1 billion GMV, came from U.S. brands.

“A China strategy and a digital strategy is going to be critical in the post-pandemic world,” Evans told CNBC.

Singles Day is not just about driving sales, however. Both Alibaba and JD.com see it as away to acquire new customers and the companies have been focusing on so-called lower tier Chinese cities which usually have more price-sensitive consumers. The e-commerce giants see this as a critical part to their growth strategy.

“Many brands have come to realize the huge size of the Chinese market, so they customize products for lower-tier cities by leveraging JD’s data and our supply chain capabilities,” Xu Lei, CEO of JD Retail, told CNBC in an interview that aired Thursday.