Singles' Day: Alibaba smashes records at world's largest online shopping event

Dark Sorrow

Respected Member
Senior Member
Joined
Mar 24, 2009
Messages
1,883
Likes
738
Country flag
Alibaba smashed its Singles' Day shopping record on Friday by clocking growth of more than 32 percent, the Chinese e-commerce giant said on Friday.

Retailers on Alibaba's platforms had recorded $17.8 billion worth of gross merchandise volume (GMV). In 2015, the 24-hour e-commerce sales event racked up $14.3 billion GMV in total.

"Back in 2013, $5.14 billion was our one-day GMV. Now we can achieve it in one hour," Alibaba Group CEO Daniel Zhang told the company's live blog earlier in the day, adding that in the first hour of Singles' Day, orders were coming in 175,000 per second.

Media reports had forecast GMV from Alibaba's 11.11 Global Shopping Festival, as Singles' Day is officially called, to come at $20 billion in 2016, easily eclipsing the $2.74 billion and $3.07 billion respectively generated online during the Black Friday and Cyber Monday sales in the U.S. this year.

Singles' Day was first celebrated in the 1990s by young, single Chinese as an anti-Valentine's Day. In 2009, Alibaba began using the made-up "holiday" to promote discounts at retailers on its e-commerce platforms, as a means of boosting revenue in the traditionally quiet sales period before the Lunar New Year season.

Increasingly, international brands have jumped on Alibaba's Singles' Day bandwagon, with more than 14,000 taking part in the 2016 sale, accounting for about 30 percent of total GMV half-way into the event, according to Alibaba stats. Orders, meanwhile, came from 207 countries and regions.

Alibaba reported that deals offered by Apple, Nike and Siemens were among the top-sellers with Chinese consumers in the early hours of the day. Local Chinese brands that made a strong showing were appliance manufacturers Haier and Midea, and smartphone maker Meizu.

Alibaba has worked to make Singles' Day increasingly international, with its star-studded "countdown gala" this year featuring appearances from retired NBA star Kobe Bryant, footballer David Beckham and his fashion designer wife Victoria, and U.S. pop band OneRepublic. Jack Ma, founder of the Alibaba Group, showed up to perform a magic trick, and the new Alibaba Pictures' film production was also promoted during the gala.

Duncan Clark, chairman and MD of the business advisory BDA China, told CNBC's "Squawk Box" on Friday that the gala was a clever merging of Alibaba's focuses on entertainment and shopping.

"In China, shopping is entertainment," Clark said. "A lot of people [in inland cities] are tuning in to live broadcasts for products. Hundreds of thousands of people follow internet celebrities who use these platforms to sell."

Clark noted that ensuring some spotlight hit its non-e-commerce arms was an opportunity for Alibaba to guarantee it could ride out any slowing of interest in Singles' Day itself.

"Jack Ma likes to say that they're no longer an e-commerce company. They're sort of transcending that," he said. "It's about data, it's about finance, it's about media."

Interest in e-commerce at present, however, remains strong.

Jessie Qian, head of consumer markets at KPMG China, told CNBC on Friday that mobile e-commerce transactions have been a major driver of China's online sales boom. At least 90 percent of online shoppers in China had used their smartphone at least once to make a transaction, she said, and forecast that that number would continue to grow.

"There are several factors contributing to the growth in mobile users. First of all, it's the access of cheaper mobile phones and secondly, the confidence in the third party payments (systems)," she said.

Duncan Clark, chairman and MD of the business advisory BDA China, told CNBC's "Squawk Box" on Friday that the gala was a clever merging of Alibaba's focuses on entertainment and shopping.

"In China, shopping is entertainment," Clark said. "A lot of people [in inland cities] are tuning in to live broadcasts for products. Hundreds of thousands of people follow internet celebrities who use these platforms to sell."

Clark noted that ensuring some spotlight hit its non-e-commerce arms was an opportunity for Alibaba to guarantee it could ride out any slowing of interest in Singles' Day itself.

"Jack Ma likes to say that they're no longer an e-commerce company. They're sort of transcending that," he said. "It's about data, it's about finance, it's about media."

Interest in e-commerce at present, however, remains strong.

Jessie Qian, head of consumer markets at KPMG China, told CNBC on Friday that mobile e-commerce transactions have been a major driver of China's online sales boom. At least 90 percent of online shoppers in China had used their smartphone at least once to make a transaction, she said, and forecast that that number would continue to grow.

"There are several factors contributing to the growth in mobile users. First of all, it's the access of cheaper mobile phones and secondly, the confidence in the third party payments (systems)," she said.

Meanwhile, the number of middle class consumers in Southeast Asia and India was also growing, and they wanted high-quality goods from the U.S. and Europe, Alibaba's President Evans said, according to the company's live blog.

Observers need only work out which markets had high internet penetration and consumers who preferred to access the web through mobile to figure out where Alibaba would head next, he said.

This is the first year that shoppers in Taiwan and Hong Kong could buy global brands on Tmall, Alibaba's online retail platform, on Singles' Day and analysts expect the e-commerce event to be gradually rolled out globally in the years ahead.

CORRECTION: Alibaba reported 32 percent growth in this year's Singles' Day shopping. That figure was misstated in an earlier version of this article. The report has also been updated to reflect that Alibaba's GMV for 2015 was $14.3 billion, not $14.4 billion as previously reported.

Link
 

Dark Sorrow

Respected Member
Senior Member
Joined
Mar 24, 2009
Messages
1,883
Likes
738
Country flag
Alibaba Group Holding Ltd (BABA.N) Singles' Day festival posted a record 120.7 billion yuan ($17.73 billion) worth of sales on Friday, though the gala shopping day saw growth slow as Chinese shoppers searched for deeper discounts and lower pricetags.

Amid fanfare and celebrity razzmatazz, sales on Alibaba's platforms had raced to a billion dollars in less than five minutes and broke past last year's total with almost nine hours of the day-long shopping gala to spare.

The final total marked a 32 percent rise from 2015, but growth was significantly lower than the 60 percent increase last year, a reflection of more caution among shoppers who opted to spend less money on each purchase than in previous years.

The 24-hour event, held annually on Nov. 11, offers a benchmark for Alibaba's performance and an insight into China's swing to online shopping, especially via smartphones.

Alibaba Chairman Jack Ma played down the importance of the final figure in a speech shortly before midnight, echoing other executives who spoke during the day.

"(Singles' Day) is not about a number only," said Ma, adding that the gross merchandise value (GMV) metric was "misleading" because it undervalued the company's wider ecosystem.

GMV refers to the value of goods sold by vendors through Alibaba's platforms. Alibaba makes money through advertising and charging vendors a proportion of their sales.

"When volumes started to grow a little less fast I actually became more relaxed," said Ma, citing the challenge of handling such a large number of orders. "We don't want to collapse the entire logistics system."

The discount shopping day, also known as "Double 11", still shifts more goods than the Black Friday and Cyber Monday sales days in the United States combined.

The slowdown in sales growth comes amid a more saturated domestic online retail market, a weaker economy and sluggish personal income growth hitting consumers' wallets. A strong U.S. dollar also hit the headline sales figure in dollar terms.

MOBILE SHOPPING SURGE

After a beefed-up marketing push over the last month - with fashion shows and virtual reality games - sales officially opened at midnight, releasing a wave of pre-orders that shoppers had placed ahead of the event. Sports stars David Beckham and Kobe Bryant attended the countdown, though headline act Katy Perry pulled out last minute citing a family issue.

At mid-afternoon on Friday a live sales tracker at an Alibaba event in the southern Chinese city of Shenzhen ticked passed the 2015 yuan total, ensuring the day set a record.

The rise of Singles' Day reflects how China's consumers, armed with smartphones, are racing online to shop - to the detriment of bricks and mortar stores. Around 82 percent of total sales were via mobile devices, up strongly from last year.

The day itself is a double-edged sword for many: Couriers and packaging firms say low prices and steep competition mean profit margins are slim despite large sales volumes.

Retailers are also starting to feel the pinch: The cost per order shrank to 184 yuan ($27) from approximately 194 yuan in 2015, according to the unaudited metrics released by Alibaba.

Cut-throat competition for customers has also caused concern over false advertising and massaged statistics. This week China's business regulator advised mainland online shopping platforms to guard against suspect sales tactics.

In May this year, Alibaba said the U.S. Securities and Exchange Commission (SEC) was looking into how it reports its Singles' Day figures. Alibaba said at the time it was cooperating with the authorities, and that the SEC advised it the investigation should not be seen as an indication the company had violated federal securities laws.

Alibaba declined to comment on the SEC probe on Friday.

The company has also faced criticism for its failure to address selling of counterfeit goods on its online marketplace. During his speech Jack Ma called on authorities to confiscate licences from manufacturers making counterfeit products.

"Someone has to remove their licences, someone has to close them down," said Ma, adding that Alibaba itself was "not law enforcement".

Alibaba is not the only retailer to mark Nov. 11 with a massive sales drive. China's no. 2 e-commerce player, JD.com Inc (JD.O), and many others also offer discount deals on the day.

Link
 

Latest Replies

Global Defence

New threads

Articles

Top