Singles Day fest: Alibaba notches up sales of $21 billion in just 18 hours
The gross value of sales processed by Alibaba’s online payment system Alipay was roughly equivalent to the annual economic output of Honduras or Afghanistan.world Updated: Nov 11, 2017 21:41 IST
E-commerce giant Alibaba notched up sales of nearly $21 billion as China’s masses shopped online for everything from diapers to diamonds during the annual celebration of consumption that is the country’s much larger version of Black Friday.
Sales during Singles Day, also known as Double 11 for the November 11 date, blazed to $1.5 billion within three minutes of starting at midnight on Saturday, as people rushed to snap up bargains during the world’s biggest one-day online shopping festival.
The event launched in 2009 by Alibaba ended up shattering the previous year’s sales mark, as it does every year. Eighteen hours into the event, Alibaba said the gross value of sales processed by its online payment system Alipay was nearly $21 billion – roughly equivalent to the annual economic output of Honduras or Afghanistan.
The figure was well past the $17.8 billion logged over the full 24 hours last year, which itself marked a 32% year-on-year increase.
By comparison, American shoppers spent more than $5 billion last year shopping online on Thanksgiving Day and Black Friday, according to Adobe, which tracks such data. Total online retail sales in India during 2016 were estimated to be worth about $16 billion.
Singles Day began as a protest of sorts against Valentine’s Day, propelled by college students in the 1990s. The event’s date, written numerically as 11/11, was associated with unattached singles, known as “bare sticks” in China.
Starting at midnight, online retailer JD.com’s distribution centers shipped out diamonds, Chilean frozen salmon, tires, diapers, beer, shoes, handbags, and appliances in trucks.
One offer, from Chongqing-based online alcohol brand Jiang Xiao Bai, allowed 33 customers to make a single payment of 11,111 yuan ($1,673) for a lifetime supply of grain liquor known as baijiu.
On Friday night, Alibaba hosted a lavish gala in Shanghai, directed by one of the producers behind the 2016 Academy Awards. Celebrities such as Nicole Kidman, Pharrell Williams and Maria Sharapova helped count down the moments before the 60,000 participating global brands released their Singles Day deals to shoppers.
The yearly display of rising Chinese consumer spending power has become crucial for manufacturers and retailers across the country, accounting for a significant share of annual orders for many businesses.
Five minutes after midnight, Alipay was processing 256,000 payment transactions per second, doubling last year’s high-water mark, Alibaba said.
More than 90% of Alipay orders were placed via mobile, the majority on Alibaba’s main e-commerce platform Taobao.com. More than half of China’s 1.3 billion people use smartphones, which have become central to daily life, used for messaging, shopping, news and entertainment, ordering taxis and meals, and serving as digital wallets for a range of point-of-sale purchases.
Transaction volumes were pumped up by many Chinese delaying purchases of mundane items like rice and toilet paper to take advantage of cut-rate prices. E-commerce’s huge growth in China has put New York-listed Alibaba neck-and-neck with Amazon as the world’s most valuable e-commerce company, while also making its rival, Nasdaq-listed JD.com, a Fortune 500 company.
Alibaba is investing heavily in creating an entire user ecosystem encompassing cloud computing, artificial intelligence, automated stores using face-recognition, and is pushing into overseas markets under much-travelled boss Jack Ma, one of China’s richest men.
But environmentalists accuse Alibaba and other e-tailers of fuelling a culture of excessive consumption and mountains of waste.
Greenpeace said “Singles Day” deliveries last year created 130,000 tonnes of packaging waste – less than 10% of which is recycled. It said e-commerce is actually more carbon-intensive than brick-and-mortar shopping, calling “Singles Day” a “disaster for the environment”.
But the growth of Chinese e-commerce has proved a boon to hundreds of once-backward interior towns and villages, now dubbed “Taobao villages” after re-orienting their local economies toward manufacturing for online buyers.
Analysts say Alibaba will take “Singles Day” global as Chinese e-commerce growth rates are expected to slow in years ahead. It already has a substantial stake in Lazada, an online retailer in Southeast Asia – a hot e-commerce battleground – and recently launched an electronic trading hub in Malaysia, its first outside China.
Alibaba said hundreds of millions of Southeast Asian consumers will be able to access Taobao this “Singles Day”.
“This is just the start. We will see tens of billions of dollars injected abroad (by Alibaba),” said Li Chengdong, a Beijing-based independent e-commerce analyst. “It could end up dominating e-commerce in developing countries.”