How alibaba.com had single day sales of US $14.3 Billion?
Posted by, Shishir Gupta on November 13, 2015
Are you wondering alibaba.com (alibaba group) had single day sales of US $14.3 Billion?
Alibaba Group Holding Ltd. logged a record 91.2 billion yuan ($14.3 billion) in sales on Singles’ Day, turning a sweethearts’ holiday dreamed up two decades ago into a major online shopping event.
Transactions had passed last year’s record of $9.3 billion before midday in China, according to the company. The top-selling items by retailers using Alibaba’s platform included baby-related and nutritional products, Nike sneakers and Levi’s jeans, the company said.
Chairman Jack Ma raised the stakes this year by moving the event’s headquarters to Beijing, bringing in more foreign brands and enlisting Hollywood celebrities Daniel Craig and Kevin Spacey to add glamour to the shopathon. Tapping into rising disposable incomes has paid off for China’s biggest e-commerce emporium as it captures more of the country’s surging smartphone use with restaurant deliveries and video streaming.
“Chinese consumers have a lot of money in their hands,” said Chen Xingdong, chief China economist at BNP Paribas SA in Beijing. “Online retailers need to customize their products to serve these increasingly savvy urban consumers. ”
Alibaba got a boost as China’s retail sales accelerated in October, overcoming the slowest economic growth in 25 years. Retail sales climbed 11 percent, the quickest gain this year and beating the median projection of economists, as the nation’s leaders seek to re-balance the economy toward consumption and services.
“The consumers that can create and lead demand will survive,” Ma said Wednesday night. “In the next 15 years, China’s economy will be good.”
Taking Singles’ Day festivities to China’s political, economic and media hub came after Alibaba’s roller-coaster first year as a public company. A record offering was followed by a record fall below the initial price, allegations the company wasn’t doing enough to fight counterfeits on its platforms, and the replacement of its chief executive officer. The shares fell 1.9 percent to $79.85 at the close in New York.
Ma kicked off the event with a four-hour variety show that included a performance by “American Idol” finalist Adam Lambert and an appearance by Craig, star of the James Bond films. “House of Cards” star Spacey made a YouTube video.
Singles’ Day, a Chinese twist on Valentine’s Day, was invented by students in the 1990s, according to the Communist Party-owned People’s Daily. When written numerically, Nov. 11 is reminiscent of “bare branches,” the Chinese expression for bachelors and spinsters.
The Singles’ Day promotion was started by Alibaba in 2009 and copied by rivals, morphing into China’s version of Cyber Monday. For the first six years, results were tabulated in Alibaba’s hometown of Hangzhou, in eastern China.
Alibaba estimated that 1.7 million deliverymen, 400,000 vehicles and 200 airplanes would be deployed to handle packages holding everything from iPhones to underwear. Mobile devices accounted for 69 percent of Wednesday’s transactions, Alibaba said in a statement.
“The sales on Singles’ Day shows the power of the Internet and that China still has considerable consumption potential,” said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co. “Alibaba’s success is a success of its platform, and it’s hard to replicate. ” To boost traffic on its platforms, Alibaba is focusing on attracting U.S. retailers to China.
To boost traffic on its platforms, Alibaba is focusing on attracting U.S. retailers to China, President Michael Evans told Bloomberg TV. The company is opening a third U.S. office in New York to go along with those in Washington and San Francisco, he said. Ma said Alibaba is considering bringing the 24-hour Nov. 11 event to the U.S. and the U.K.
“This year’s event is more global with international players joining in,” said Fangting Sun, a senior research analyst with Euromonitor. “Alibaba aims to both attract more international players selling products to China and the domestic players to expand to the overseas markets.”
The company said in September it was adding Beijing as another headquarters, with an eye toward “the globalization of Nov. 11.”
“Alibaba wants this event to be high profile -- Beijing has the kind of media resources that it will need,” said Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings. “Gaining exposure is a means to ensure growth this year.”
Singles' Day, a twist on Valentine's Day, started in China in the 1990s as an obscure holiday but has snowballed into a consumer phenomenon thanks largely to Alibaba Group Holding Ltd., founded by Jack Ma and which runs China's largest online marketplace.
Singles' Day is celebrated on Nov. 11 because the date—11/11—is reminiscent of "bare branches," the Chinese expression for bachelors and spinsters.
In 2009, Alibaba sparked the flame that turned it into what it is today—a massive marketing event selling everything from electronics and clothing to cosmetics and food at big discounts. It sells through Tmall, AliExpress and Taobao Marketplace platforms, and through merchants' brick-and-mortar stores.
Here are five points that illustrate just how big the phenomenon is:
Analysts expect sales to surge to a new record. Last year, Alibaba sold more than $1 billion worth of products in the first three minutes of the sales. Total sales on Singles' Day zoomed up to 57.1 billion yuan ($9 billion) within 24 hours, or four times bigger than the U.S.'s Cyber Monday, named after the rise in online retail sales the Monday after Thanksgiving. Forty-three percent of transactions were done on mobile devices.
More than 1 million products were placed on sale last year, according to Comscore. Customers this year will be able to choose from more than 6 million products from around 40,000 merchants and 30,000 brands. Consumers are expected to spend an average of 1,761 yuan ($277) per person, up 22 percent year on year, according to a Nielsen survey of more than 1,000 Chinese Internet users.
Alibaba estimates that 1.7 million deliverymen, 400,000 delivery vehicles, 5,000 warehouses and 200 airplanes will be deployed by its partners to handle the deliveries. China Post, the country's postal service, estimates that 760 million packages will be shipped by various Chinese e-shopping sites to customers on the day. That’s up significantly from 540 million packages produced last year, according to a post office quote by Alibaba's news site Alizila. Retailers will be offering more perks such as free refunds and delivery when using online-to-offline channels, according to Bloomberg Intelligence.
Singles' Day has become more globalized. Alibaba says Costco Wholesale Corp., LG Electronics Inc., Walt Disney Co., Fisher-Price Inc., Lego AS, Metro AG and J Sainsbury PLC will be among the global brands participating this year. Apple Inc., Calvin Klein Inc., Macy's Inc. and Burberry Group PLC have participated in recent years. Major retailers and brands are using Singles' Day as an opportunity to introduce themselves to the Chinese consumer, said Brian Buchwald, chief executive officer of New York-based consumer intelligence company Bomoda.
Offline brands involved in Singles' Day promotions include Shanghai Jahwa United Co. Ltd., Suning Commerce Group Ltd., Intime Retail Group Co. Ltd., Estee Lauder Companies Inc. and BAIC Motor Corp. Ltd., according to a Barclays PLC note on Nov. 4.
Alibaba is adding some star power to the event, with a guest list that includes U.S. singer Adam Lambert and Chinese film director Feng Xiaogang, known for his top-grossing comedy films. Celebrities from Taiwan and China including pop singer Jolin Tsai, actress Vicki Zhao, Mandopop singers Jane Zhang and Amber Kuo, and boy band TFBOYS were also invited to a Nov. 10 gala ahead of the sales rush, according to a Barclays report.