Delivery men sort through goods at a distribution center in Beijing
It only took Jack Ma half the time yesterday to sell the same amount of stuff as he did a year ago with his online channels.
Transactions through Alibaba Group Holding Ltd. during the annual Singles’ Day shopping event passed 57.1 billion yuan (USD9 billion) before midday, eclipsing last year’s record with another 12 hours still to go. By 4:30 p.m. Beijing time, they totaled almost 70 billion yuan. The top-selling items included baby-related and nutritional products and apparel by Nike and Levi’s, the company said.
“This year’s event is more global with international players joining in,” said Fangting Sun, a senior research analyst with Euromonitor. “Alibaba aims to both attract more international players selling products to China and the domestic players to expand to the overseas markets.”
China’s biggest e-commerce emporium moved the base for its annual shopathon to the former Olympic aquatics center in Beijing as Ma tries to reverse the company’s $55 billion plunge in market value. Shifting from its Hangzhou home to the heart of Chinese power shows Alibaba’s ambitions to maintain growth, penetrate the northern region where rival JD.com Inc. is based and answer the government’s call for “national champions” in technology.
The sales figures come as China’s retail sales accelerated in October, overcoming a slowing economy. Retail sales climbed 11 percent, the quickest gain this year and beating the median economist projection, as the nation’s leaders seek to re-balance the economy toward consumption and services.
Taking Singles’ Day festivities to China’s political, economic and media hub comes after Alibaba’s roller-coaster first year as a public company. A record offering was followed by a record fall below the initial price, allegations the company wasn’t doing enough to fight counterfeits on its platforms, and the replacement of its chief executive officer.
Alibaba founder Jack Ma
“The move is symbolically significant because it indicates that Alibaba, by moving to the capital, is China’s indisputable e-commerce leader,” said Cyrus Mewawalla, managing director of London-based CM Research. “Politically, it might be a tacit acknowledgment that Alibaba, a national champion, now has to be closer to China’s authorities and more in tune with the government’s strategic interests.”
Ma kicked off the event with a four-hour variety show that included a performance by “American Idol” finalist Adam Lambert and an appearance by Daniel Craig, star of the James Bond films who helped sell Cadillacs. “House of Cards” star Kevin Spacey also made a YouTube video.
Alibaba estimates that 1.7 million deliverymen, 400,000 vehicles and 200 airplanes will be deployed to handle packages holding everything from iPhones to underwear.
“We’re seeing more and more consumers shifting to mobile,” CEO Daniel Zhang said Tuesday night. “That’s why we’ve prepared special promotion sessions during peak commute hours, so people can shop on their phones.”
That was underscored by data from Alibaba showing that 27 million people were shopping on mobile phones, fueling 72 percent of early sales.
The nation’s per capita disposable income rose 7.7 percent in the first nine months from a year earlier – after adjusting for inflation – outpacing the 6.9 percent rise in gross domestic product. Participation and spending by consumers is expected to increase this year, with clothing and footwear being the most popular category, according to a survey by Nielsen Holdings Plc.
Alibaba’s Singles’ Day turnover may soar to 87 billion yuan, according to researcher IDC. The company has confidence in the resilience of the Chinese economy and is focusing on attracting U.S. retailers to China, President Michael Evans told Bloomberg TV. To that end, Alibaba is opening a third U.S. office in New York to go along with those in Washington and San Francisco, he said.
Singles’ Day, a Chinese twist on Valentine’s Day, was invented by students in the 1990s, according to the Communist Party-owned People’s Daily. When written numerically, the Nov. 11 date is reminiscent of “bare branches,” the Chinese expression for bachelors and spinsters.
The Singles’ Day promotion started by Alibaba in 2009 has been copied by rivals and has morphed into China’s version of Cyber Monday. For the first six years, the results were tabulated during a ceremony held in Hangzhou, eastern China.
Alibaba said it decided to shift to the capital because of the city’s influence.
“The globalization of Nov. 11 and of Alibaba has to start from Beijing,” Alibaba wrote in an Oct. 13 post on its official Weibo account.
Moving the event also allows Alibaba to take advantage of the city’s media machine, said Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings. The company said in September it was adding Beijing as another headquarters, with an eye toward the northern China market.
“Alibaba wants this event to be high profile – Beijing has the kind of media resources that it will need,” Hao said. “Gaining exposure is a means to ensure growth this year.” Bloomberg
New sales high in just 12 minutes
Alibaba had recorded sales of 10 billion yuan (USD1.57 b) within 12 minutes and 28 seconds of midnight, smashing records again on this year’s Singles’ Day yesterday, China’s online buying fiesta akin to America’s Cyber Monday. Last year, it took 38 minutes to hit the 10b yuan mark and the company is expected to easily break last year’s one-day sales record of 57.1b yuan. As of 8:30 a.m., the figure stood at 44.2b yuan, according to the company’s Zhejiang HQ.
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