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Alibaba Singles' Day breaks sales record

Employees sort packages at a hub of an express delivery company in Nantong, Jiangsu province following Singles Day in 2012. Photo: Reuters

Chinese consumers are spending billions of dollars shopping online for anything from diapers to diamonds on "Singles Day", a day of promotions that has grown into the world's biggest e-commerce event.

China's biggest e-commerce giant, Alibaba Group, said on Saturday that its Singles' Day sales extravaganza hit $25.4 billion, smashing its own record from last year and cementing it as the world's biggest shopping event. Last year, sales on Alibaba's platforms totaled over 120.7 billion yuan.

Once a celebration for China's lonely hearts, Singles' Day has become an annual 24-hour buying frenzy that exceeds the combined sales for Black Friday and Cyber Monday in the US, and acts as a barometer for China's consumers.

American shoppers last year spent more than $5 billion shopping online on Thanksgiving Day and Black Friday, according to Adobe, which tracks such data. Shoppers also spent $3.39 billion on Cyber Monday last year, the largest single online shopping day in the US, Adobe said.

As tills shut midnight on Saturday, Alibaba's live sales ticker registered 168.2 billion yuan, up 39 percent from 120.7 billion yuan last year. The dollar figure was up more steeply due to the strength of the yuan against the greenback this year.

'Big event'

The event began soon after a star-studded event in Shanghai late on Friday. As midnight hit, a deluge of pre-orders helped drive a billion dollars of sales on Alibaba's platforms in the first two minutes and $10 billion in just over an hour.

"In terms of scale it just dwarfs any other event out there," said Ben Cavender, Shanghai-based principal at China Market Research Group.

At just past the halfway mark, the headline gross merchandise volume swept past last year’s dollar total just shy of $18 billion. Shortly afterwards, sales surpassed the 2016 total in the local currency.

The event gets shoppers around China scouting for bargains and loading up their online shopping carts, while delivery men – and robots – brace for an estimated 1.5 billion parcels expected over the next six days.

"This is a big event for China, for the Chinese economy," Joseph Tsai, Alibaba's co-founder and vice chairman, said. "On Singles' Day, shopping is a sport, it's entertainment."

Tsai said that rising disposable incomes of China's "over 300 million middle-class consumers" was helping drive the company's online sales – and would continue. "This powerful group is propelling the consumption of China," he said.

Investors closely watch the headline number, though some analysts say the way it is calculated is too opaque. The US Securities and Exchange Commission launched a probe into Alibaba's accounting practices in 2016, including into its Singles' Day data. That investigation is as yet unresolved.

Competition from JD.com

Although Alibaba dominates the headlines with record sales year-on-year, but another company just stepped out to remind us that others are busy trying to close the gap.

JD.com, the perennial challenger to Alibaba's e-commerce empire in China, just revealed its 11/11 figures for the first time. While not as high as Alibaba's 168.2 billion yuan ($25.4 billion) the company did process an impressive 127.1 billion yuan in gross merchandise volume, which works out to around $19.14 billion.

There's no direct comparison but the figure is a touch above Alibaba's 2016 11/11 sales volume of 120.7 billion yuan. The figure is also higher than the $17.6 billion that JD.com grossed for its own 6/18 sales event — which commemorates the date of its founding — although that bonanza lasts for 18 days rather than just one like Single's Day.

JD.com was previously fairly guarded over Single's Day data — instead choosing to talk up percentage growth — but with this announcement today it has reminded people that it is indeed a close challenger to Alibaba.

On consumer e-commerce marketshare, iResearch puts JD.com's reach at around 25 percent, while Alibaba is said to have just over 55 percent but there's more to it than that.

The main difference between the two is that Alibaba operates a marketplace approach with its e-commerce businesses, whereas JD.com opted for an Amazon-like vertical approach to sales.

There is also a disparity in size.

Alibaba sits on the New York Stock Exchange with a market cap of $477 billion. JD.com, meanwhile, is listed on the NASDAQ and valued at around $57 billion. Still impressive, for sure, but a small fraction of Alibaba.

Nonetheless, long-time Alibaba CEO Jack Ma noticed the potential of the rival early on.

The Information reported this week that back in 2011 Ma wanted JD.com founder Richard Liu to open a store on Alibaba's platform to avoid the potential of direct competition. Liu rejected the offer has gone about making his company, which was then less established, Alibaba's chief rival through a different approach to e-commerce, and by embracing technology such as drones and robots faster.


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