Alibaba’s singles day shopping bonanza got off to a scorching start, logging more than 114 billion yuan (€14.8 billion) of purchases in less than 90 minutes, the equivalent of more than half of last year’s record haul for the 24-hour event.
An estimated half-billion shoppers from China to Russia and Argentina are expected to swarm the e-commerce giant's sites to scoop up everything from iPhones and refrigerators to cashew nuts. The company again hosted a televised entertainment revue in Shanghai to run alongside the bargain-hunting, this time enlisting Taylor Swift to try and pump up sales.
The world’s largest shopping event has become an annual ritual for Asia’s largest company, a 24-hour marathon that’s part showcase of commercialism and part publicity blitz. Also referred to as “Double 11” because it falls on November 11th, it will be closely watched by investors keen to gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6 per cent.
Tensions between Washington and Beijing continue to fuel uncertainty and roil business. Among China's largest corporations, Alibaba is expected to better ride out the storm, thanks to booming online consumption in the world's number two economy.
"Alibaba will probably be the one that will be able to circumvent and come out from the trade war in better shape" versus Baidu and Tencent, Richard Wong, head of ICT for the Asia Pacific at Frost and Sullivan, told Bloomberg. "The current sentiment and confidence in terms of spending is still relatively high."
Enormous discounting
While Alibaba and its rivals routinely trumpet record sums in the aftermath of their events, it’s unclear how much November 11th sales actually contribute to the bottom line given the enormous discounting involved.
Singles’ Day emerged as a uniquely Chinese antidote to the sentimentality surrounding Valentine’s Day. Emerging on college campuses across the country, it takes its name from the way the date is written numerically as 11/11, which resembles “bare branches,” a local expression for the unattached.
It’s now become an excuse for people to splurge. Last year, sales at Alibaba climbed 27 per cent to 213.5 billion yuan, or the equivalent to $30.7 billion at the time. More merchandise is sold online over the 24-hour period than during the five-day US holiday buying spree that begins on Thanksgiving and ends on Cyber Monday.
But the company's facing stiff competition this year as smaller platforms including JD.com and Pinduoduo - the aggressively expanding upstart that's now encroaching on the market leaders' turf. They're vying for the wallets of Chinese shoppers, particularly in the relatively untapped rural areas. All employ heavy discounting and hard-sell tactics in the run-up to and during the 24 hours in a bid to best the previous year's record. – Bloomberg
