The Singles ‘ Day shopping bonanza sales of Alibaba Group Holding Ltd. got off to a scorching start, logging more than 114 billion yuan ($16.3 billion) of sales in less than 90 minutes, the equivalent of more than half of last year’s 24-hour record haul.
An estimated half-billion shoppers are expected to flood the pages of the e-commerce giant from China to Russia and Argentina to scoop up everything from iPhones and refrigerators to cashew nuts. The business again hosted a televised music magazine in Shanghai to run alongside bargain-hunting, this time trying to pump up sales by Taylor Swift and Asian pop icon G.E.M.
The largest shopping experience in the world has become an annual tradition for Asia’s largest company, a 24-hour marathon that is the marketing part display and part advertisement blitz.
Often referred to as “Double 11” because it falls on November 11, investors will be closely watching to see how eager Chinese consumers are to spend as economic growth threatens to drop below 6 percent.
Tensions between Washington and Beijing continue to fuel volatility and roil trade. Among China’s largest corporations, it is predicted that Alibaba will be better off the storm thanks to bo.
“Alibaba will probably be the one that will be able to circumvent and come out from the trade war in better shape” versus Baidu Inc. and Tencent Holdings Ltd., Richard Wong, head of ICT for the Asia Pacific at Frost & Sullivan, told Bloomberg Television. “The current sentiment and confidence in terms of spending is still relatively high.”
Although Alibaba and its competitors are regularly reporting trumpets in the aftermath of their activities, it is unknown how much Nov. 11 sales actually add to the bottom line given the huge discount involved.
A special Chinese antidote to the sentimentality surrounding Valentine’s Day arose as Singles ‘ Day. Emerging across the country on college campuses, it takes its name from how the date is written numerically as 11/11, which resembles “baric branches,” a regional term for the unattached.
Now it’s becoming an excuse for splurging people. Alibaba’s revenues soared 27 percent last year to 213.5 billion yuan or the equivalent at the time of $30.7 billion. Over the 24-hour cycle, more merchandise is sold online than over the five-day U.S. holiday buying spree which starts on Thanksgiving and ends on Cyber Monday.
But this year the company faces stiff competition as smaller outlets, like JD.com Inc. and Pinduoduo Inc. –the rapidly growing upstart that is now threatening the territory of market leaders. They are fighting for Chinese shoppers ‘ wallets, particularly in the rural areas that are relatively untapped.
In the run-up to and during the 24 hours, all use strong discounting and hard-selling tactics in a bid to achieve the best record of the previous year.
“Overall, we think this year will probably see a more competitive Double 11 time,” said Ella Ji, an analyst at China Renaissance Holdings Ltd., in a statement. “We anticipate that each platform will spend more on subsidies.” Daniel Zhang, who took over as chairman of Alibaba from billionaire Jack Ma in September, pioneered the show in its current form in 2015.
This year, the Singles ‘ Day impresario is transferring the baton to Jiang Fan, president of Taobao and Tmall e-commerce markets, and a potential successor to Zhang himself.
“Consumers have become more diverse and younger over the years. In order to serve them, every generation of customers needs their own peers, “Zhang said in a post on Alibaba’s website.” I think this young team is the future.
“The 2019 version already comes with subtle twists to the equation. Alibaba, criticized for shipping an unprecedented 1 billion products in a single day to damage the environment— has directed its logistics arm Cainiao to set up recycling centers in 75,000 locations. This says that picking up used packages and packaging will also work for courier companies.