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Singles' Day reaps billions for Alibaba
IT ONLY took Jack Ma half the time on Wednesday to sell the same amount of stuff he did a year ago with his online channels.
Transactions through Alibaba Group Holding Ltd during the annual Singles' Day shopping event had passed 57.1 billion yuan (S$12.8 billion) before midday, eclipsing last year's record with still 12 hours still to go. By the end of the day, total sales had hit 91.2 billion yuan.
The top-selling items were baby-related and nutritional products and Nike and Levi's apparel, said Alibaba.
Fangting Sun, a senior research analyst with Euromonitor, said: "This year's event is more global with international players joining in. 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 centre in Beijing amid Mr Ma's attempts to reverse the company's US$55 billion plunge in market value. Moving 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 to 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 per cent, the quickest gain this year and beat the median projection among economists, 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 follows Alibaba's roller-coaster first year as a public company. A record offering was followed by a record fall below the initial price, allegations that the company wasn't doing enough to fight counterfeits on its platforms and the replacement of its chief executive officer.
Cyrus Mewawalla, managing director of London-based CM Research, said: "The move is symbolically significant because it indicates that Alibaba, ... is China's indisputable e-commerce leader. 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."
Mr 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. "House of Cards" star Kevin Spacey made a YouTube video.
Alibaba estimates that 1.7 million delivery men, 400,000 vehicles and 200 airplanes will be deployed to handle packages holding everything from iPhones to underwear.
The company's chief executive Daniel Zhang said on Tuesday evening: "We're seeing more and more consumers shifting to mobile. That's why we've prepared special promotion sessions during peak commute hours, so people can shop on their phones." This was underscored by data from Alibaba showing that 27 million people were shopping on mobile phones, fuelling 72 per cent of early sales.
The nation's per capita disposable income rose 7.7 per cent in the first nine months from a year earlier - after adjusting for inflation - outpacing the 6.9 per cent 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, said a survey by Nielsen Holdings.
Alibaba's Singles' Day turnover may soar to 87 billion yuan, said researcher IDC. The company has confidence in the resilience of the Chinese economy and is focusing on attracting US retailers to China, said IDC president Michael Evans. To that end, Alibaba is opening a third US office in New York, after those in Washington and San Francisco, he said.
Singles' Day, a Chinese twist on Valentine's Day, was invented by students in the 1990s, reported 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.
Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings, said Alibaba's move to Beijing lets it take advantage of the city's media machine.
"Alibaba wants this event to be high profile - Beijing has the kind of media resources that it will need. Gaining exposure is a means to ensure growth this year," he said. BLOOMBERG