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Alibaba's Singles' Day sales hit record $38 billion; growth slows

Published 11/11/2019, 07:59 PM
Updated 11/11/2019, 07:59 PM
© Reuters. Alibaba Group Executive Chairman and CEO Daniel Zhang attends the Alibaba Group's Singles' Day global shopping festival at the company's headquarters in Hangzhou

By Josh Horwitz

HANGZHOU, China (Reuters) - Chinese retailer Alibaba (NYSE:BABA) Group Holding Ltd's sales for its 24-hour Singles' Day shopping blitz hit a record $38.4 billion, more than U.S. rival Amazon.com (NASDAQ:AMZN) Inc's haul last quarter from online store sales.

But sales growth for the annual shopping festival eased to 26%, the weakest since the event started in 2009, held back by a slowing e-commerce industry in China as the country's economic expansion heads toward a historic low.

The event https://tmsnrt.rs/2WTFm7V, a gauge of Chinese consumer sentiment, has also become a shop window this year for Alibaba as it plans to sell $15 billion worth of shares in Hong Kong this month. The U.S.-listed firm has spent big to diversify its business yet still earns over four-fifths of revenue from e-commerce.

Alibaba turned China's informal Singles' Day into a shopping event in 2009 and built it into the world's biggest online sales fest, dwarfing Cyber Monday in the United States which took in $7.9 billion last year. The name is a play on the date, Nov. 11, rendered 11/11 - or Double Eleven, as the event is also known.

The event has since been replicated at home and abroad, with Singles' Day promotions found at rivals such as China's JD.com Inc and Pinduoduo Inc as well as South Korea's 11thStreet and Singapore's Qoo10.

Alibaba said on Monday its gross merchandise volume or GMV for the whole event came in at 268.4 billion yuan ($38.4 billion), up 26% from last year but below Citic Securities' forecasts for a 20-25% expansion.

In 2018, it posted a 27% sales increase.

CELEBRITY START

The Chinese retail juggernaut, with a market value of $486 billion, kicked off this year's 24-hour shopping bonanza with a live performance by U.S. pop star Taylor Swift followed by live-streamed marketing of over 1,000 brands.

The firm said 84 brands including those of Apple Inc (NASDAQ:AAPL), L'Oreal SA and Fast Retailing Co Ltd's Uniqlo each made over 100 million yuan in sales in the first hour.

Over half of merchants on its Tmall marketplace used live streaming to sell products during the event, and sales generated through the medium surpassed 10 billion yuan at 8.55 a.m. (0055 GMT), Alibaba said.

"Nearly all our brands have opted for livestreaming promotions some time this year," says Josh Gardner, who helps overseas companies sell products on Tmall as CEO of Kung Fu Data.

"It's more entertaining than browsing through a product detail page. Traffic from livestreaming is easy to convert into transactions, and Tmall has supported stores that run livestreaming activities with resources."

One vendor, New Zealand-based nutritional supplement maker Clinicians, broadcast livestreams from a booth set up on Alibaba's campus. According to Carlos Zhao, China market manager, the company has seen a 40% jump in sales after it started livestreaming in China six months ago.

"This is a product form from new Zealand, everything is in English, and so many people are selling similar products, so customers wonder, 'Which one do I choose from?'" he told Reuters. "Having a livestreamer can help to break those barriers."

Tmall has said it expects over 500 million users to make purchases this year, about 100 million more than last year. It has also put more emphasis this year on promotions targeting areas outside of China's massive first- and second-tier cities.

"The younger generation is buying more, and the customer from rural areas, the customers from lower-tier cities, they are buying imported products," Tmall General Manager Alvin Liu told reporters.

Singles' Day is known to be a stressful time for Alibaba employees with workers sleeping at the office to keep up with orders.

This year, at Alibaba's campus in Hangzhou, workers bustle around in red t-shirts with the slogan 'Make 11 happen'.

Percussion echoes through halls as departments bang large drums each time a sales record is broken. Pink rice cakes – dingshenggao, or 'victory cakes' eaten by Yue Army soldiers during the Song Dynasty - fill the office snack bars.

© Reuters. Alibaba Group Executive Chairman and CEO Daniel Zhang attends the Alibaba Group's Singles' Day global shopping festival at the company's headquarters in Hangzhou

This is the first time Alibaba's Singles' Day is being held since its flamboyant co-founder Jack Ma resigned as chairman in September to "start a new life".

Latest comments

It really doesn't matter. AI has turned the market into a ********shoot. on your best day shares can drop ten bucks. On your worst, they can go up 20.00.
I just bought a quilt cover, a tripod and a cable release, about 65 US dollar in total. And most of colleagues also bought many things, much more than me, because they got higher pay than me.
What they're not factoring into consideration is 11-11 returns the following week.
For me,what I bought is I really need or want, so if there is no quality issue, I won't return them.
This is you though. Think of all the women shopping right now who will return half the clothes they bought. Have personally watched it happen. That said, 11-11 is still wildly profitable.
It actualy hit 300 billin dollars i verified it for 5 bucks
For the naysayers, I offer you this. Companies have very little to gain from lying on something like this. I work for a large financial institution and analysts respond best to accurate transparency, good or bad. They aren't playing the market like us. Full disclosure - my current position is $522k UGPIX
It’s a bad number actually. Slowest growth ever.
ok so technically on a % basis, you are correct. But 22% increase when you are in the billions is still big.... and we are talking about 1 hour of sales. no need to get hyped either way
Agreed with you, most of the products on AliExpress are affordable and target mass consumers, not surprise at all.
They can say 500 billion dollars no one can verify the truth ???
why you bother to read this when you already got your mind set. oh right... you're here to troll.
became he needs to complain something
who believe this
who know how speak english
Noone here.
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