Alibaba says Singles Day shoppers spend $2 bn in first hour

November 11, 2014
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/AFP
Alibaba says Singles Day shoppers spend $2 bn in first hour/AFP

, SHANGHAI, November 11- Alibaba said a record $2 billion of goods were sold in the first hour of its Singles Day shopping bonanza in China Tuesday, maintaining the day’s dominance as the world’s biggest retail event as it went global for the first time.

The e-commerce giant said that amount was more than a third of the $5.8 billion full day sales recorded on the same day last year and analysts say this year will blow that out of the water.

Alibaba has been pushing November 11 as Singles Day — so named for the number of ones in the date — since 2009 as it looks to tap an expanding army of Internet shoppers in China, which has the world’s biggest online population.

Singles Day already surpassed major shopping festivals in the US in terms of transaction value last year, toppling the combined online sales of $3.7 billion recorded on Thanksgiving Day, Black Friday and Cyber Monday, according to an estimate by Internet analytics firm comScore.

The day was originally marketed as an “anti-Valentine’s Day” in China featuring hefty discounts to lure the country’s singletons and price sensitive buyers.

It has been expanded globally this year to include overseas merchants and customers.

Within the first hour and 12 seconds, more than 12.23 billion yuan ($2 billion) of deals were settled on both domestic and international retail marketplaces, Alibaba said in a statement, adding that 45.7 percent of the transactions were made via mobile devices.

Headquartered in the eastern city of Hangzhou, Alibaba debuted its shares in New York two months ago with a record-breaking $25 billion initial public offering.

The giant operates China’s most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the online market for consumer to consumer transactions.

The company does not sell products directly but acts as an electronic middleman. It also owns other marketplaces, including business to consumer platform Tmall.

 

– World’s top online retail market –

 

More than 27,000 brands and merchants are participating in this year’s Singles Day, while consumers in more than 220 countries and regions will be able to join the 24 hour spending spree, the statement said.

Wang Xiaoxing, a Beijing-based analyst with consultancy Analysys International, estimates Singles Day this year could generate around 55 billion yuan ($9 billion) in transaction value.

“The enormous increase in Singles Day sales is supported by the strong growth in China’s overall online retail market,” Wang said. “As the country’s penetration rate of online shopping increases, consumers’ spending power also grows stronger.”

China overtook the United States last year to be the world’s largest online retail market, with sales of 1.85 trillion yuan, statistics from the commerce ministry show.

“Alibaba has been a main driver and leader of China’s online retail market, it has especially pushed the developments in online payment system and logistics networks,” said Wang of Analysys International.

Alibaba’s online payment arm Alipay is China’s largest third party online payment service provider in terms of payment volume. The group has also established its own logistics unit with major delivery service providers in the country.

Some 500 million packages are expected to be shipped during this year’s festival, up 50 percent from last year, the state postal service told state media last month.

But some Internet users were less impressed, accusing some merchants of fooling consumers by raising prices beforehand.

“I don’t know why people are so excited about the ‘Double 11’ (November 11). It’s meaningless as they all hike prices before offering a discount,” one wrote on China’s Twitter like blogging service Sina Weibo.

Alibaba said last week its third quarter net profit jumped 15 percent year on year to $1.1 billion, its first earnings report since successfully completing the world’s biggest stock offering in September.

Revenue soared by 53.7 percent from the same quarter last year to $2.7 billion, it said.

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