Another year, another Alibaba’s Singles Day sales record with sales reaching $30.8 billion (RMB213.5 billion), up 27% for the one-day e-commerce extravaganza. Last year, sales were $25.3 billion for the promotion, also known as Alibaba’s 11.11 Global Shopping Festival.
The company said it handled more than one billion orders through its fulfillment network, Cainiao Smart Logistic. In 2017, it handled 812 million orders.
Chinese middle class flexes its purchasing power
Despite rumblings trade wars and economic question marks, the growing Chinese middle class showed they are willing to buy and buy big.
“I think you have to understand Alibaba and what Alibaba’s doing in the context of the long-term secular trend that’s developing in China, which is the rise of the Chinese middle class,” said Alibaba Executive Vice Chairman Joe Tsai in the company’s newsletter. “That trend is not going to stop, trade war or no trade war.”
The OECD predicts China’s middle class will grow from 300 million to 850 million by 2030 and explains why international marketers keep their options open for future sales.
Global brands jumped on board
Alibaba said more than 180,000 brands participated in the giant sales extravaganza including more than 280 global brands.
The company’s logistics system had no significant problems handling the record volume of sales and shipments, even utilizing satellites to improve the efficiency of its delivery partners.
“During the 2018 festival, over 40% of consumers bought from international brands. Also, 237 brands topped RMB100 million in GMV, including leading international brands Apple, Dyson, Kindle, Estée Lauder, L’Oréal, Nestle, Gap, Nike, and Adidas,” the company reported in its newsletter.
An estimated 40% of Chinese consumers purchased from foreign vendors with Japan, the US, South Korea, Australia, and Germany among the top-selling countries. Apple’s iPhone even outsold local phone brands Huawei and Xiaomi although Alibaba did not release specific sales figures.
Lessons for other e-commerce leaders
The success of the 10th Singles Day promotion is more than a testament to the size of the Chinese consumer market.
It also highlights the importance and value of technology and logistics in handling e-commerce on this immense scale.
James Hebbert, UK managing director of Chinese online ad agency Hylink says Alibaba has also figured out how to make it absolutely simple for consumers to purchase online.
“This all relates back to basic behavioral economics — the easier it is to buy something, the more likely it is that consumers will buy it,” Hebbert told Retail Dive.
Alibaba is also pioneering a new direction for retail, blurring the line between stores and entertainment. “China is leading the way with O2O strategies and New Retail, ensuring a seamless offline to the online shopping experience,” Hebbert added.
Besides the online and off-line sales, Alibaba offered $143.6 billion (RMB1 billion) in “red packets” – in-store coupons for discounts on goods and services. Alibaba’s 88 VIP loyalty program members also received special 5% discounts for 11.11 in addition.
Visuals courtesy of Alibaba, Apple
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