Alibaba Smashes Singles’ Day Sales Record in Half the Time

(Bloomberg) - It only took Jack Ma half the time 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 passed 57.1 billion yuan (Dh33 billion) before midday, eclipsing last year’s record with 12 hours still to go. By 9.26pm Beijing time, they totalled 81.3 billion yuan. The top-selling items included baby-related and nutritional products, Nike sneakers and Levi’s jeans, the company said.

Ma raised the stakes with this year’s event by moving it to Beijing, bringing in more foreign brands and Hollywood celebrities Daniel Craig and Kevin Spacey to add glamour to the shopathon. Tapping into rising disposable incomes has paid off for China’s biggest e-commerce emporium as it captures more of China’s surging smartphone use with restaurant deliveries and video streaming.

“Chinese consumers have a lot of money in their hands,” said Chen Xingdong, chief China economist at BNP Paribas SA in Beijing. “Online retailers need to customize their products to serve these increasingly savvy urban consumers. ”

Retail Growth

Alibaba’s figures come as China’s retail sales accelerated in October, overcoming the slowest economic growth in 25 years. Retail sales climbed 11 per cent, 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.

“The consumers that can create and lead demand will survive,” Ma said Wednesday night. “In the next 15 years, China’s economy will be good.”

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.

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 Craig, star of the James Bond films. “House of Cards” star Spacey made a YouTube video.

US Expansion

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.

“The sales on Singles’ Day shows the power of the internet and that China still has considerable consumption potential,” said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co.“Alibaba’s success is a success of its platform, and it’s hard to replicate. ”

Data from Alibaba showing that 68 per cent of Wednesday’s transactions were being made via mobile devices.

Alibaba’s Singles’ Day transactions may reach 87 billion yuan, according to researcher IDC. To boost traffic on its platforms, the company is focusing on attracting US retailers to China, President Michael Evans told Bloomberg TV. Alibaba is opening a third US office in New York to go along with those in Washington and San Francisco, he 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.”

‘Bare Branches’

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 November 11 date is reminiscent of “bare branches,” the Chinese expression for bachelors and spinsters.

The Singles’ Day promotion was started by Alibaba in 2009 before being copied by rivals and morphing into China’s version of Cyber Monday. For the first six years, results were tabulated in Alibaba’s hometown of Hangzhou, eastern China.

The company said in September it was adding Beijing as another headquarters, with an eye towards “the globalisation of November 11”.

“Alibaba wants this event to be high profile — Beijing has the kind of media resources that it will need,” said Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings. “Gaining exposure is a means to ensure growth this year.”