New sales record for Chinese giant Alibaba

Alibaba hit a new sales record on November 11th, 2017 or Singles’ day. The Chinese e-commerce giant reported that sales during what has become over the last decade the world’s biggest shopping day amounted to $25.3 billion, a 40 percent jump compared to the same period last year. Additionally, the retailer set a record $18 billion in just 13 hours on Saturday, eclipsing last year’s record of $17.8 billion in 24 hours. Sales from the Chinese e-commerce’s one-day holiday are nearly double those from Black Friday and Cyber Monday in the U.S. combined.

Just like U.S. versions of shopping holidays, Alibaba offered discounts on 15 million products from 140,000 brands. To celebrate the kickoff of this event, Alibaba founder Jack Ma held a gala at the Shanghai Mercedes Arena, with celebrities like Pharell Williams, Nicole Kidman, and Jessie J in attendance. On stage, a countdown was running on a huge screen, where a billion dollars in revenue from Tmall (B2C) and Taobao (C2C), Alibaba’s platforms, was reached within two minutes. The show was aired on both Alibaba’s video service and on three Chinese TV networks, and was covered by hundreds of Chinese and foreign journalists.

A waning interest

Singles’ Day was created at China’s Nanjing University in 1993 by four friends as a version of Valentine’s Day for people without romantic partners. The college students came up with the idea of celebrating singles on November 11th (11.11) because all four digits for this day are the lonesome “1”. At first, only men partook in the festivities, whereas now both sexes do. The first Singles’ Day sale was organized in 2009 by launching a massive marketing push and offering special “Double 11” deals.

But if Singles Day’ may be the most important timing to achieve annual revenue goal for retail companies, interest seems to be already waning in the country after just eight Single Days. According to the Chinese marketing data technology firm Admaster, only 65 percent of interviewees said they would attend the festival in 2017, compared to 84 percent in 2015. These figures highlight changing consumption trends among middle-class shoppers. If Singles’ Day is renowned for the deep discounts offered by retailers, more and more Chinese are looking for better quality products and services. And for that, they are willing to pay.

JD.com is now taking advantage of this trend. This direct online sales company, Alibaba’s main competitor in the domestic market, has a major advantage: better logistics management. Alibaba’s platforms put sellers in direct contact with customers, while JD.com works more like an online supermarket. The company buys products, stores them in its own warehouses and delivers them through an army of delivery men, who also provide customer support. Its “Double 11” lasts 11days, from November 1 to 11, allowing for more flexible operations.

More international brands

Facing this competition, Alibaba wants to lure more international brands onto its platforms, combating Taobao’s bad reputation for offering counterfeit products. It seems to be paying off. According to Alibaba, out of 100,000 retailers who attended Singles’Day last year, 10,000 were foreigners. This year, out of 140,000 sellers, 60,000 came from abroad, 250 of which were French.

Alibaba is also trying to be more innovative. This year, the giant retailer used an online-to-offline strategy to streamline sales between its e-commerce platforms and the merchants with bricks-and-mortar stores selling on them. For example, Alibaba took the Pokemon Go augmented reality game idea and applied it to Tmall, but with cats (Catch the Tmall cats). Chinese consumers were then able to find discount coupons in different stores, such as the French cosmetics brand L’Occitane. L’Oréal set up an interactive mirror at its Shanghai store where shoppers could try on virtual makeup using augmented reality and then order products on a touch screen linked to an Alibaba platform.

But the blockbuster sales of Singles’ Day create an enormous amount of waste. According to Greenpeace, the manufacturing, packaging and shipping linked to the event produced 258,000 tons of carbon dioxide emissions last year. It would take about 2.6 billion trees to absorb it all. This year’s online shopping frenzy is about to leave an even larger carbon footprint, warned the environmental activist group.