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HANGZHOU, China / HONG KONG – Alibaba Group Holdings Singles Day purchases surpassed $ 74 billion in total sales on Wednesday, a large increase from last year’s all-time high suggesting strong consumer health in the second. world’s largest economy.
According to data released by Alibaba shortly after midnight on Thursday, buyers had acquired 498.2 billion yuan ($ 74 billion) of goods. Even the cumulative transaction volume after the first half hour surpassed the total sales total from last year’s event, when merchants on Alibaba’s platforms sold 268.4 billion yuan worth of items.
Livestreaming has played a bigger role in attracting price-sensitive customers this year. During the peak of the sales event, some 583,000 orders were placed per second, with hundreds of millions of shoppers logging in from midnight to grab bargains.
Known as Double 11, and also branded by Alibaba as the “11.11 Global Shopping Festival”, the promotion is the world’s largest retail event. This year, Alibaba added an additional sales window from November 1 to November 3 and allowed customers to pre-order from October 21.
The festival, which grew out of an unofficial holiday to celebrate the lives of single people, is expected to offer a glimpse into consumer appetites in the world’s second-largest economy, which is recovering strongly from the coronavirus pandemic.
Alibaba’s main competitors, including JD.com and Pinduoduo, also offered deep discounts on their platforms. JD. com reported sales of 271.5 billion yuan, up from 204.4 billion last year.
But this year’s event comes as regulators in Beijing have proposed new guidelines to control the influence of major internet companies, whose services have penetrated all aspects of life in China.
The draft guidelines target the practices of online retail platforms, such as requirements that vendors operate on one company’s platforms exclusively and offer different prices to different customers based on their purchasing history.
The news hit the stocks of Internet companies a lot. Over the past two days, Alibaba’s Hong Kong-listed shares fell more than 14%, while its smaller rival, JD.com, fell 17%. Tencent Holdings’ share fell 11% and Meituan, China’s largest local services platform, fell 19%.
“We do not believe that the guidelines are targeting Alibaba,” the vice president of Alibaba Group and general director of marketing and operations of Tmall and Taobao said during a press conference on Wednesday. Taobao is Alibaba’s flagship consumer-to-consumer shopping platform, while Tmall is a separate business-to-consumer platform.
Alibaba has denied that it prohibits its platform providers from listing elsewhere. Alibaba earns revenue primarily by charging vendors marketing and advertising fees to promote their products.
As the coronavirus pandemic had kept more people at home this year, live streaming has become an increasingly important channel for engaging customers.
In the 12 months ending in September, Taobao’s live channel’s gross merchandise volume reached 350 billion yuan, about 5% of the group’s annual GMV in fiscal 2019.
Between March and June, the number of visitors to the channel increased 160%, while the number of participating merchants increased 220% over the same period last year.
The format is expected to play a bigger role in driving overall retail sales. More than 400 company executives and 300 celebrities are broadcasting live during the Singles Day promotion.
However, analysts warned that Singles Day may not be a reliable barometer of a strong recovery in consumption in China.
“The rules this year are very different from last year,” said Ernan Cui, China consumer analyst at Gavekal Dragonomics. “It’s hard to tell if consumers are buying that much.”
Cui said the additional sales window and expansion of promotions to include service platforms linked to Alibaba have helped boost transaction volumes. But some categories affected by the coronavirus pandemic, particularly high-priced goods such as foreign travel packages, are far from reaching the levels of previous years, he said.
“The buying behavior of Chinese consumers has not returned to normal,” Cui said.
This year, shoppers seem to have more reason to stock up on products. For one thing, retailers tend to offer steep discounts to boost sales after experiencing a decline in sales in the first half of the year.
Kelly Chai, an employee of a technology company in Beijing, bought a bottle of eye cream on Wednesday, even though she still had an unopened bottle at home. “I saved more than 200 yuan,” he said.
People are more likely to accumulate daily necessities after experiencing a lack of resources in the early days of COVID-19, “said Shirley Li, assistant professor at Hong Kong Baptist University, as people want to regain a sense of control.
Beyond China, Alibaba’s cross-border e-commerce platforms, including Singapore’s Lazada Group, are running their own versions of Double 11, targeting customers in Southeast Asia and other regions.
For Alibaba, this year’s event also comes on the heels of another setback: the postponement of the planned initial public offering of Ant Group, the fast-growing fintech company owned by Alibaba by one third. Both Ant and Alibaba were founded by Jack Ma, the billionaire tech entrepreneur.
Ant’s IPO was shelved after Beijing acted abruptly to tighten regulations governing the company’s lending activity. While Ant is expected to try to revive its listing plans, analysts expect the rule changes to lower the valuation it can achieve.
Some observers have seen the regulatory actions as a warning to Ma, who remains Ant’s largest shareholder but no longer has a formal role in either company, so as not to challenge Beijing too directly.
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