Chi­nese spend bil­lions on Sin­gles’ Day

Alibaba says 83% of sales via mo­bile de­vices

Kuwait Times - - BUSINESS -

SHANG­HAI:

Chi­nese shop­pers un­leashed a record del­uge of cash on­line for Sin­gles Day yes­ter­day, Alibaba said, spend­ing more than $13 bil­lion with the e-com­merce gi­ant in the world’s biggest on­line shop­ping pro­mo­tion. Sin­gles’ Day - named for the re­peated digit 1 in the date Nov 11 - was cre­ated by Alibaba in 2009. Now in just 24 hours it sur­passes the main US on­line spend­ing spree, the five days from Thanks­giv­ing to Cy­ber Mon­day. Gross mer­chan­dise vol­ume, Alibaba’s key mea­sure of on­line sales, had over­taken last year’s to­tal of 91.2 bil­lion yuan ($13.4 bil­lion) by 3:20 pm (0720 GMT), the firm said - with more than $1 bil­lion spent in the first five min­utes.

Sim­i­larly, ri­val e-com­merce gi­ant JD.com, which fo­cuses more on elec­tron­ics, said its sales to­tal which it did not spec­ify - sur­passed last year’s fig­ure at 1:33 pm. Some shop­pers stayed up un­til mid­night to pur­chase dis­counted goods the mo­ment Sin­gles Day got un­der way. Among them was Shang­hai white-col­lar worker Chen Yang, 29, who tried to buy things she had her eyes on ear­lier and spent about 1,000 yuan on pur­chases from shoes to sham­poo. “I’m so happy af­ter I fin­ished my shop­ping, though I still need to pay my credit card later,” she said. “But I’m just so look­ing for­ward to get­ting my pack­ages now.”

In the US, to­tal on­line sales for the five days from Thanks­giv­ing through Cy­ber Mon­day last year stood at $11.1 bil­lion, ac­cord­ing to Adobe Digital In­dex. Alibaba’s New York-listed stock has been buoy­ant this year in spite of wor­ries over slow­ing growth in China, as con­sumer spend­ing has ex­panded while the old in­dus­trial econ­omy strug­gles due to over­ca­pac­ity and slug­gish de­mand. China’s econ­omy ex­panded at its slow­est rate in a quar­ter of a cen­tury last year and has eased fur­ther this year, as Bei­jing tries to shift growth driv­ers from in­vest­ment and ex­ports to do­mes­tic con­sump­tion.

‘Con­fi­dence In­dex’

Alibaba kicked off this year’s event with a gala in the south­ern city of Shen­zhen on Thurs­day night, invit­ing in­ter­na­tional and do­mes­tic stars from bas­ket­ball player Kobe Bryant to pop rock band One Repub­lic. Singer Katy Perry was also orig­i­nally sched­uled to per­form but can­celled at the last minute due to a fam­ily emer­gency, she said on China’s Twit­ter-like Weibo.

An­a­lysts said the event, which has gained more and more trac­tion in the past few years, is key to Alibaba. The day’s turnover was only “a very small frac­tion of its to­tal an­nual sales”, in­de­pen­dent ecom­merce an­a­lyst Li Cheng­dong said, but was “a con­fi­dence in­dex for the firm”. “If they do well in this, it is a boost to in­vestors’ con­fi­dence,” he told AFP. But sales growth may not match last year’s 60 per­cent rise, he warned, in the face of eco­nomic wor­ries and stricter reg­u­la­tion.

The rise of Sin­gles’ Day re­flects how China’s con­sumers, armed with smart­phones, are racing on­line to shop - to the detri­ment of bricks and mor­tar stores. So far yes­ter­day, 83 per­cent of sales were via mo­bile de­vices, up strongly from last year, Alibaba said. The day it­self is a dou­ble-edged sword for many: Couri­ers, pack­ag­ing firms and ven­dors say low prices and steep com­pe­ti­tion mean profit mar­gins are slim de­spite large sales vol­umes. Cut­throat com­pe­ti­tion for cus­tomers has also caused con­cern over false ad­ver­tis­ing and mas­saged sta­tis­tics.

China’s com­merce watch­dog SAIC sum­moned Alibaba and 14 other e-com­merce com­pa­nies ear­lier this week, ban­ning them from mak­ing up fake or­ders and lift­ing prices be­fore giv­ing out dis­counts. Alibaba it­self has sought to down­play the im­por­tance of the turnover statis­tic. “I don’t have any re­quire­ment for the sales fig­ure,” Alibaba quoted chair­man Jack Ma as say­ing in a state­ment on Weibo, adding the day was all about “hap­pi­ness and joy”.

On­line shop­ping is a bright spot in Bei­jing’s ef­forts to trans­form the econ­omy, grow­ing 26.1 per­cent in the Jan­uary to Septem­ber pe­riod ac­cord­ing to the Na­tional Bureau of Sta­tis­tics. That out­stripped both over­all re­tail growth of 10.4 per­cent in the pe­riod, and of­fi­cial GDP ex­pan­sion of 6.7 per­cent in each of the first three quar­ters. China’s State Post Bureau has es­ti­mated the coun­try will han­dle more than one bil­lion pack­ages dur­ing the six days from yes­ter­day, up 35 per­cent from last year, the of­fi­cial news agency Xin­hua re­ported.

SHEN­ZHEN, China: Alibaba Group Chair­man Jack Ma speaks on the “Sin­gles’ Day” global on­line shop­ping fes­ti­val in south­ern China’s Guang­dong prov­ince yes­ter­day.

SHEN­ZEN: Bri­tain’s David Beck­ham (cen­ter) and his wife Vic­to­ria Beck­ham (third left) at­tend the 2016 Tmall 11:11 Global Shop­ping Fes­ti­val gala on Thurs­day. —AFP

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