Workers sort through boxes of goods Friday at a delivery company in Lin'an in east China's Zhejiang province. Singles Day on Nov. 11 is promoted by e-commerce giant Alibaba as the world's biggest online shopping event. Photo: Getty Images
Despite China’s cooling economy, online shoppers spent billions of dollars on Singles Day yesterday, a quirky holiday that has grown into the world’s busiest day for e-commerce.
Alibaba Group Holding Ltd Singles' Day festival posted a record 120.7 billion yuan ($17.73 billion) worth of sales on Friday, as Chinese shoppers searched for deeper discounts and lower price tags.
That is nearly six times the US$3 billion research firm comScore says Americans spent in total last year on Cyber Monday, the country’s biggest online shopping day.
Gross merchandise volume on Alibaba’s retail platforms flew past 10 billion yuan (US$1.5 billion) with just six minutes 58 seconds after the Singles Day shopping spree kicked off at midnight of November 11.
Rivals including JD.com, VIP.com and Suning offered deep discounts on clothing, smartphones, travel packages and other goods to attract shoppers.
Singles Day was begun by Chinese college students in the 1990s as a version of Valentine’s Day for people without romantic partners.
The November 11 date was picked to be “11.11” — four singles. Young people would treat each other to dinner or give gifts to woo that special someone and end their single status.
The spending gives a boost to China’s efforts to nurture consumer-based economic growth and reduce reliance on trade and investment.
E-commerce sales in China rose by 26.1 percent in the first nine months of the year. Economic growth for that period held steady at 6.7 percent, but that was its lowest level since the 2008 global crisis.
Forecasters expect the economy to cool further next year as regulators try to rein in a boom in bank lending and real estate sales that is pushing up debt levels and housing costs.
China has the biggest population of Internet users at 710 million, according to government data. Some 410 million people shop online for goods ranging from clothing and groceries to manicures and plane tickets.
E-commerce has risen from 3 percent of Chinese consumer spending in 2010 to 15 percent last year, according to Boston Consulting Group. It forecasts online spending will rise by 20 percent a year, hitting US$1.6 trillion by 2020, compared with 6 percent growth for off-line retail.
Researchers attribute the rapid rise of Singles Day to demographics and timing.
Sales on Alibaba's platforms had raced to a billion dollars in less than five minutes and broke past last year's total with almost nine hours of the day-long shopping gala to spare.
The final total marked a 32 percent rise from 2015, but growth was significantly lower than the 60 percent increase last year, a reflection of more caution among shoppers who opted to spend less money on each purchase than in previous years.
Alibaba Chairman Jack Ma played down the importance of the final figure in a speech shortly before midnight, echoing other executives who spoke during the day.
"(Singles' Day) is not about a number only," said Ma, adding that the gross merchandise value (GMV) metric was "misleading" because it undervalued the company's wider ecosystem.
The slowdown in sales growth comes amid a more saturated domestic online retail market, a weaker economy and sluggish personal income growth hitting consumers' wallets. A strong U.S. dollar also hit the headline sales figure in dollar terms.
The rise of Singles' Day reflects how China's consumers, armed with smartphones, are racing online to shop. Around 82 percent of total sales were via mobile devices, up strongly from last year.
The day itself is a double-edged sword for many: Couriers and packaging firms say low prices and steep competition mean profit margins are slim despite large sales volumes.
Retailers are also starting to feel the pinch: The cost per order shrank to 184 yuan ($27) from approximately 194 yuan in 2015, according to the unaudited metrics released by Alibaba.
Cut-throat competition for customers has also caused concern over false advertising and massaged statistics. This week China's business regulator advised mainland online shopping platforms to guard against suspect sales tactics.