This weekend proved a new high for internet retailing giant Alibaba. On Sunday, its Singles Day sales event smashed previous records with just under $31 billion worth of sales made, easily beating the $25 billion mark it hit last year.
China based Trent Oaks Patterson Capital Management watched as the event got off to a flying start, taking just 85 seconds to notch up its first billion dollars worth of sales. “It was and amazing day with many of our staff taking advantage of the discounts” said one back office worker from Trent Oaks Patterson.
Gross merchandise value (GMV), a number that reflects all sales across Alibaba’s different shopping platforms, rose past 2017’s $25 billion record at approximately 5:30 pm local time on Sunday and kept rising, up and up throughout the rest of the 24-hour event.
In terms of domestic currency, sales amounted to 213 billion yuan, easily beating last year’s figure of 168 billion yuan and representing a nearly 27 per cent year-on-year rise. That was, however, less than the 40 per cent annual growth recorded in 2017. “This may be reflective of the slowdown in China – amid concerns over the trade war” said one analyst at Trent Oaks Patterson.
Alibaba’s Singles Day GMV superseded last year’s amount in Chinese yuan value before it beat the US dollar record. The Yuan has fallen in value against the dollar over the previous year, which meant an increase yuan sales were needed to achieve the same $ amount.
This year marked the tenth Singles Day event, also known as the double eleven shopping festival as it falls on the eleventh of November annually. Alibaba offers massive discounts across its multiple platforms during the day.
Alibaba’s Singles Day sales numbers easily surpassed the spending by customers in any single American shopping holiday said Trent Oaks Patterson in a note.
After only sixty minutes, sales were over $10 billion, more than five minutes quicker than 2017. The number of delivery orders exceeded a billion.
Alibaba brought in some new features for this year’s sales extravaganza said Trent Oaks Patterson. Lazada, the Singapore-based e-commerce site operates across Southeast Asia and is majority-owned by Alibaba, had its own sales. And Ele.me, Alibaba’s food delivery platform, offered delivery for specific Starbucks outlets across eleven Chinese cities. Starbucks came to an agreement earlier this year with Alibaba to work together in China.
‘New retail focus.’
Alibaba is putting a big focus this year on a plan it calls “new retail,” which aims to bring together the online parts of its business with the offline. For example, it owns a chain of grocery stores which enable consumers to go in and shop, pay with their phone and walk out. The Starbucks agreement is part of the ‘new retail’ plan.
“When we talk about new retail, we strongly believe that online commercial world and offline brick mortars are not separate worlds. Moreover, if you look at the customer base today, everyone is living on the internet. Everybody is the internet user. You have the same consumer base. You must have the same commercial world. It’s all about how to innovate online and offline to a whole digitalised commercial world,” Zhang said.
Alibaba hosted a gala featuring A-list celebrities including Miranda Kerr and Mariah Carey which kicked off on Saturday and carried on throughout the span of the entire event. Company founder Jack Ma also made an appearance at the media event which marked the start of Singles Day, but he did not give a speech.
Singles Day offered some much welcome relief to investors as worries about the U.S.-China trade war and stock market falls in the mainland have negatively affected Chinese consumer demand. Alibaba is facing a number of hurdles with shares down nearly 16 per cent this year due to weakening investor outlook towards Chinese tech companies because of the trade war. The company also recently reduced its revenue guidance for the fiscal year.
Just before Singles Day, Daniel Zhang, CEO of Alibaba told news outlets that the U.S.-China trade tensions could be an opportunity for the company.
“Well, I would say nobody likes trade war, and nobody likes the uncertainty of the economic condition. However, what we always do is that to try to find opportunities in the tough time. If people have some pain points, this means some opportunities. How to help people in the tough time to get more business, not only in China but also in the global markets,” Zhang said.
“For Alibaba, we always think about our mission, which is make it easy to do business anywhere. I think it’s more relevant today in this condition,” he added.
Alibaba also vowed last week to assist businesses to sell $200 billion worth of goods to China in the next five years.