By Jeff Domansky, Nov 12, 2020
Alibaba’s Amazon Prime-like Singles Day sales extravaganza wrapped up with record sales of more than $74.1 billion, nearly double last year’s record $38 billion in sales.
The company sold more than 16 times the value of Amazon Prime Day by comparison. Can you spell overwhelming e-commerce success despite the COVID-19 pandemic?
Analysts had predicted strong Singles Day sales because China’s economy is on track for one of the world’s fastest rebounds after suffering through the COVID-19 crisis. But Alibaba bested the expectations by multiples as pre-event sales got the ball rolling, exceeding $56 billion between November 1-10.
Despite the superb results, Alibaba shares were up only 0.4% partly because of pending regulations from China’s antitrust regulators aimed at the country’s online marketplaces. Still, the results demonstrate the resilience of the growing middle-class Chinese consumer and the company’s long march towards its dominance of the country’s huge e-commerce market.
Singles Day sales snapshot
So how did sales shape up and what products were hot during the e-commerce sales tsunami?
More than 250,000 brands sold products during the online shopping event including in excess of 200 luxury brands such as Prada, Balenciaga, and Cartier. Over 800 million consumers shopped till they dropped at midnight on November 11 with orders peaking at 583,000 per second.
An estimated 2.32 billion orders were processed and it’s hard to imagine any other company, including Amazon, handling that volume of transactions and payments.
Competitors such as JD.com, Pinduoduo, and Douyin ran their own promotions at the same time with impressive results. Reuters said JD.com had more than $30.2 billion (200 billion yuan) in sales leading up to the close of sales at midnight. Electronics retailer Suning.com, partly-owned by Alibaba, said it made $756 million (5 billion yuan) in sales in the first 19 minutes.
The company reported two million new products were sold for the first time in its marketplace, twice as many as last year. Alibaba said 13 brands sold more than $151 million (1 billion yuan) and more than 470 companies including Adidas, Apple, Estée Lauder, Lancome, L’Oreal, Huawei, and Nike each had sales of more than $15 million (100 million yuan).
More than 2600 brands participated in the sales event for the first time. During the live stream of the event, the company said Nike sold more than $15 million of sports gear in just one minute. Other US companies fared well, earning over $5.4 billion in sales according to Alibaba.
Alibaba Group financials shine
Highlights from the September 2020 Q2 quarterly results reported by Alibaba show just how strong the bedrock of e-commerce and marketplace sales is for the company:
- $6.1 billion (RMB 41.2 billion) in profit for the quarter
- 30% year-over-year (YOY) growth in revenue
- 29% YOY growth in sales
- 60% growth in cloud computing revenue
- 881 million average unique monthly mobile users
- 757 million active annual marketplace shoppers.
In addition, cloud computing made up 10% of revenue, and like Amazon, continues to be an important business growth sector for the company. Alibaba’s logistics business also grew substantially by 73% and made up 5% of its total revenue.
Alibaba’s one-third ownership of payments provider Ant Group proved valuable as it contributed substantially to the company’s bottom line, adding $689 million in revenue.
These Q2 results are impressive by every measure and most industry analysts expect the company to continue to perform profitably and continue its impressive growth even with looming questions by Chinese regulators.
LET’S CONNECT