Chinese consumers flocked to Alibaba’s "Singles' Day" discounts on Tuesday, hitting a sales record of $9.34 billion on November 11, 2014 that smashed all previous records.
China’s dominant e-commerce company, and clear No. 1 Internet retailer, began promoting the specific calendar date for its annual 'Singles' Day' shopping event online sales in 2009 as a kind of an anti Valentine’s Day movement, with many other merchants coming on board in recent years.
Quite obviously, the date “11.11” has been chosen well, since it is easy to remember and conveniently placed in the doldrums of consumer spending between China’s National Day and the Chinese New Year holidays.
Same as last year, sales easily outstripped any equivalent shopping occasion this year, such as the famous post-Thanksgiving shopping splurges on Cyber Monday and Black Friday in the US.
Instead, Singles’ Day has become THE day of sales for China's fast growing eCommerce market, which is expected to grow at an annual rate of 25% over the next few years, from $390bn in 2014 to $718bn in 2017, according to a recent study released by management consulting firm AT Kearney.
IDC believes, according to a recent release, that "11.11" is not only a festival for Alibaba online shoppers and online retailers, but that it also changes consumers' buying behavior and influences the evolution of the China e-commerce ecosystem..
IDC commented: “Several years ago, it was hard to believe that the infrastructure of the China retail and logistics sectors could support such a great volume of consumer shopping transactions on a single day. However, this has come true with the upgraded eCommerce ecosystem in China, which is built on the 3rd Platform (cloud, mobility, social and Big Data). One of the meaningful things about the "11.11" online shopping festival is that it facilitates the development of the China business infrastructure, including IT infrastructure, logistic services, etc. Alibaba is now moving on to build a wider e-commerce ecosystem all around the world. It is likely to create a new order for cross-border business in the future, which will definitely become a huge challenge to the American eCommerce giant, Amazon. Years ago, the "11.11" online shopping festival only happened in China. Now it will go beyond China to other parts of Asia and even to the world.”
Indeed, Jack Ma, founder and executive chairman of Alibaba, said he hopes to fully bring the Singles' Day shopping holiday to global consumers by 2019 and according to Alibaba's media briefing, shoppers from more than 220 countries could take part in the shopping festival this year.
IDC believes further that mobility and online to offline (O2O) will be two important aspects of the changes in consumer behavior. Fact is that China’s anti–Valentine’s Day has become one of the most profitable manufactured holidays in history that surpassed $2 billion in sales volume processed through the Alipay mobile app within the first hour and 11 seconds on November 11, 2014.
For Alibaba, which recently listed on the New York Stock Exchange, mobility is important to demonstrate its ability in mobile eCommerce at every opportunity, since Tencent (Wechat), one of its main competitors, occupies the dominant position in social networking and mobile IM in China, IDC explained. Hence, there is huge pressure on Alibaba's future development in mobile Internet, besides high consumer expectations regarding O2O shopping. Most probably you will see new O2O models emerge where, for instance, consumers can go to offline shops to get the goods they purchased online, or consumers in offline shops can get coupons for future shopping by scanning the QR codes on the packing bags.
IDC considers the Singles’ Day shopping festival as China’s experimental field for eCommerce market innovations, which seems just so true as it gives China and the world a glimpse into the eCommerce ecosystem and consumers' shopping behavior that allows businesses to stay ahead.
By Daniela La Marca