Singles’ Day pays off for Alibaba
Record $30bn haul netted, but growth rate slows
Chinese e-commerce giant Alibaba cashed a record 213.5-billion yuan ($30.7bn) in sales on Sunday during its 24-hour online retail frenzy Singles’ Day, but the event’s annual growth dropped to its slowest rate.
Chinese e-commerce giant Alibaba cashed a record 213.5billion yuan ($30.7bn) in sales on Sunday during its 24-hour online retail frenzy Singles’ Day, but the event’s annual growth dropped to its slowest rate.
Shoppers in China and across the world snapped up hot items including iPhones, furniture and milk powder, with Alibaba recording about $10bn in sales in the first hour after midnight.
Singles’ Day, also called “Double 11”, is the world’s biggest online sales event, outstripping the sales of US shopping holidays Black Friday and Cyber Monday combined.
The Chinese event was originally a novelty student holiday to celebrate being single, countering Valentine’s Day, but has since grown into a month-long online shopping festival that peaks with a 24-hour sale on November 11.
In 2018 the company surpassed 2017’s full-day sales record of 168-billion yuan in just under 16 hours. Despite the record haul, the annual sales growth rate fell from 39% to 27%, at the low end of analyst estimates, and the slowest rate in the event’s 10-year history.
It comes as the company is grappling with a weaker sales outlook amid rising trade tensions between China and the US. Earlier in November Alibaba revised down its full-year sales outlook by 4%-6%, sending further chills through the stock price, which has dropped about 16% in 2018 after almost doubling in 2017.
To compensate, the company will take in less commission from its platforms in the near term to retain brands and attract new buyers, it said.
Online sales growth is also slowing across the board in the country’s eastern mega-cities, including Shanghai and Beijing, and Alibaba said about 75% of new users last quarter were in “less developed” areas.
While small appliances and cosmetics were strong on Sunday, sales in big-ticket items including large appliances slowed alongside a downturn in the housing market, Alibaba vice-chair Joe Tsai said.
“If people aren’t buying new homes, they aren’t buying appliances,” he said.
Despite milder growth, executives were upbeat on Sunday at a media event in Shanghai, saying the company had reached 200-billion yuan.
But “we have to continue to change to reach 300-billion or 500-billion,” said CEO Daniel Zhang.
THE COMPANY IS GRAPPLING WITH A WEAKER SALES OUTLOOK AMID RISING TRADE TENSIONS BETWEEN CHINA AND THE US