Alibaba isn’t slowing down. The Chinese ecommerce giant smashed its own sales record overnight, processing US$25.3 billion of gross merchandise volume during its annual 11.11 sale, also known as Singles’ Day.
The world’s largest online shopping event grew 39 per cent, surpassing last year’s total of $17.8 billion shortly after 1pm on Saturday. At 11pm the GMV surpassed US$24 billion before climbing to $25.3 (AUD$33 billion) at midnight.
Looking at cross-border ecommerce, Australia was the third highest selling country, up from fourth last year. The top five international countries selling into China were Japan, US, Australia, Germany and South Korea*.
Australia was also the fifth highest ranking country buying from China. For the first time this year Alibaba offered deals on national brands to the 100 million-strong Chinese diaspora around the globe.
The top five imported brands during the sale were Swisse, Aptamil, Kao Merries, Moony and Bio Island.
During the 24-hour sale 90 per cent of transactions came from mobile devices, up from 82 per cent last year.
Alibaba’s 11.11 dwarfs other international sales. Amazon’s Prime Day generated an estimated $1 billion revenue this year and Cyber Monday is expected to generate US$6.6 billion in online sales later this month.
Alibaba’s busiest day of the year is also bigger than the annual total of Australia’s online sales. Australian consumers spent around AU$23.28 billion online over the 12 months to August 2017, according to NAB’s Online Retail Sales Index.
“More than US$25 billion of GMV in one day is not just a sales figure,” said Daniel Zhang, CEO of Alibaba Group.
“It represents the aspiration for quality consumption of the Chinese consumer, and it reflects how merchants and consumers alike have now fully embraced the integration of online and offline retail.”
Aside from the total amount of cash processed by Alipay during the 24-hour sale, the most impressive stats came shortly after the sale began.
US$1 billion of total GMV was settled through Alipay in the first 2 minutes and 1 second and, within 2 hours US$11.9 billion was settled through Alipay.
The early figures are a result of consumers loading up their online shopping carts in the days leading up the 11.11 and waiting until the sale begins at midnight to click the ‘buy’ button.
11.11 put the company’s infrastructure to the test; within the first hour Alibaba Cloud processed 325,000 orders at peak and Alipay processed 256,000 payment transactions per second at peak.
By 9:30am on Saturday 100 million deliveries had been dispatched. At midnight the number delivery orders was 812 million.
Retail is a sport
Alibaba wants its Singles’ Day festival to be known for entertainment and fun, not just discounts.
“On Singles’ Day, shopping is a sport. Shopping is entertainment,” Alibaba co-founder and vice executive Chairman Joe Tsai told media in Shanghai before the sale began.
In the hours leading up to the shopping event Alibaba hosted a Chinese-style variety show — think Olympic opening ceremony meets the Super Bowl half time performance — held in Shanghai’s Mercedes-Benz Arena.
The heavily sponsored event featured celebrity appearances alongside product placement.
This year the gala featured Pharrell Williams singing an ode to 11.11, Maria Sharapova racing against oversized falling dominos and Nicole Kidman, who introduced a short film “Gong Shou Dao”– produced and starring Alibaba founder Jack Ma alongside martial arts legends.
Viewers could stream the show live Youku, the Tmall and Taobao mobile apps and YouTube as well as watching across through Zhejiang TV, Beijing TV and Shenzhen TV.
So, what’s driving the growth?
Prior to the sale Alibaba’s Tsai told media “the power of the Chinese consumer” is responsible for the growth of Singles’ Day.
“There are today over 300 million middle class consumers in China. Every year, their disposable income increases. Every year, they are demanding better and better quality goods,” Tsai said.
“They want a better standard of living, and this powerful group is propelling the consumption of China, and it’s going to shift the economy from an export driven and investment driven economy into a consumption driven economy.”
“In 1990, when Alibaba was founded, the GDP per capita of China was $870. Today the GDP per capital is over $8,000 U.S. This is a 10x increase in GDP per capita just in the last 18 years.”
2016 versus 2017
- GMV: US$17.8 billion versus US$25.3 billion
- Mobile GMV: 82 per cent versus 90 per cent
- Alipay processed 120,000 payment transactions at peak versus 256,000 payment transactions per second at peak.
- Alipay processed 1.48 billion total payment transactions, up 41 per cent from 2016.
- Alibaba Cloud processed 175,000 orders per second in 2016 versus 325,000 orders at peak this year.
- Cainiao Network processed more than 657 million deliveries versus 812 million orders as of midnight.
- 140,000 brands participated this year versus 100,000 last year.
*Chinese consumers have been boycotting South Korean companies following its decision to provide land for a US missile-defence system, which may have contributed to Australia’s rise from fourth to third.
Tess Bennett travelled to Shanghai as a guest of Alibaba.