Alibaba sales hit US$8.6B in first hour

SINGLES DAY EVENT

LULU YILUN CHEN HONG KONG • Alibaba Group Holding Ltd. kicked off its annual Singles’ Day shopping bonanza, logging US$8.6 billion in sales within the first hour.

Shoppers from at least 192 countries and regions swarmed the e-commerce giant to scoop up discounted lobster, iPhones and refrigerators, at a rate of as many as 256,000 transactions per second. The Chinese company hosted a star-studded gala enlisting tennis star Maria Sharapova and American rapper Pharrell Williams to pump sales. As the event got underway, 93 per cent of transactions were done via mobile.

Analysts are expecting another record day on Alibaba’s platforms, with Citigroup Inc. predicting a 31 per cent rise in transactions to 158 billion yuan (US$23.8 billion). While that’s only half of last year’s growth rate, it still dwarfs other events such as Black Friday and Cyber Monday. Billionaire founder Jack Ma is using this year’s event as a testing ground for his plans to revamp China’s US$4 trillion traditional retail sector with technology, an experiment that could help the behemoth gain an edge in China’s saturated retail market.

“The work that’s been done in the integration of offline and online, not just in terms of the technology integration, but the data and efficiencies for brands and the consumer through personalization has been enormous,” Alibaba president Mike Evans said in an interview on Bloomberg TV. “We see the impact of it in our dayto-day business.”

Nov. 11 emerged as a counter-cultural antidote to the sentimentality surrounding Valentine’s Day. 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.

Now, it’s become an excuse for people to shop and binge on entertainment shows. Hangzhou-based Alibaba is using the occasion to test the limits of its cloud computing, delivery and payments units — businesses that could benefit from roping in traditional retailers as customers.To that end, Alibaba teams fanned out across the nation ahead of Nov. 11 to help outlets — some 600,000 momand-pop convenience stores and some 1,000 brands — upgrade their computer systems. Those retailers, many in prime city locations, will become delivery and storage centres.

To connect a 10th of China’s 6 million convenience stores to the internet, Alibaba uses an app called Ling Shou Tong, meaning “connect retail.” Convenience stores are provided suggestions on what to procure and how to display merchandise. The goods are shipped from dedicated Alibaba warehouses, obviating the middlemen they would otherwise have dealt with. In theory, that improves their profit.