Singles’ Day Sales in China Fetched over $9 Billion for Alibaba (NYSE:BABA)

635

By David Scouts on November 11, 2014 Company, Market

Alibaba Group Holding (NYSE:BABA), the online Chinese retailer, has announced that its annual “Singles’ Day” shopping event has fetched more than $9 billion in sales. By Tuesday evening, sales crossed 47.3 billion yuan ($7.7bn; £4.9bn) and 224 million orders were dispatched to the buyers. In contrast, $5.75bn of sales were made by the firm last year through delivery of orders in excess of 150 million. Resultantly, Singles’ Day is regarded as the globally biggest online retail sales day comparable to online shopping Monday after Thanksgiving in United States known as “Cyber Monday”.

Alibaba (NYSE:BABA) was hopeful to make record sales through huge discount offerings during the yearly event. Jack Ma, executive chairman of Alibaba, was confident of selling a nerve-racking quantity of goods and gave an estimate for shipment of 200 million packages against the orders during the one day sale event. However, the target was beaten by 1800 hrs as per Beijing time.

BBC News Beijing correspondent, Celia Hatton said that this murky holiday, originally dedicated to single people as a reaction to anti-Valentine’s Day, ultimately became largest annual shopping day in China and hence majority of Chinese were astonished to see this change. A user on Weibo, Chinese answer to Twitter, commenting on the transition wrote that Nov 11^th was just a Singles’ Day, then it became the Shopping Day and finally emerged as the Couples’ Shopping Day. While other’s blame Alibaba of bringing this revolution since Alibaba used the popular term “Double-11” for November 11 holiday in 2012 and a handsome amount of profit was made by the website on that day. On the lighter side, one Weibo user wrote that since behind every successful man there is a woman supporting him, behind Jack Ma (Alibaba’s CEO) there are millions of women shoppers shopping.

However, people also complained that online deals were too tempting and as a result people end up spending too much of their money and buying everything which they see without even needing them. Historically, Singles’ Day was started by students in Nanjing University in 1993 as anti-Valentine’s Day for single people to shop for themselves. However, Alibaba (NYSE:BABA) tailored it to swell its sales in 2009 and became a phenomenon in ever expanding e-commerce market of China. Management consulting firm AT Kearney published in a report that with the annual growth rate of 25% for the next few years, the market would grow from $390bn in 2014 to $718bn in 2017. Recently concluded annual Singles’ Day sale was able to ensure active involvement of more than 27,000 global brands including American, Japanese and Spanish.

As per Shaun Rein, a China Market researcher based in Shanghai, a number of new brands have approached themselves for the first time ever to participate in the Singles’ Day event and endorsed it as major retail activity at par with Christmas and the Chinese New Year. He further highlighted the challenges faced by Alibaba (NYSE:BABA) which is still lagging behind in sales generated from mobiles in Chinese e-commerce market since 31% of Alibaba’s sales are generated by mobile against market average of 35%.