Alibaba’s global shopping bonanza gets even bigger
Last Monday, Chinese e-commerce giant Alibaba’s annual Global Shopping Festival saw unprecedented numbers, besting its record from 2018. The shopping event has arguably morphed into the world’s closest watched e-commerce phenomenon and is being mimicked by other technology giants including Amazon.
This year, the event racked up more than $38 billion in gross merchandise volume, up from $31 billion in 2018, rising about 25% year-on-year and an improvement on the 21% growth it clocked in 2018. It means that in 24 hours Alibaba received orders roughly equivalent to the annual GDP of Bahrain, the 94th largest economy by GDP in the world. Buying was so frantic this year that sales exceeded $13 billion in the first hour of the event.
The Global Shopping Festival, which began as Singles Day in 2009 with a comparatively very modest $7.8 million in gross merchandise volume and only 27 sellers, has now grown to include more than 200,000 brands. According to Alibaba, consumer electronics and fashion items were among the most popular goods this year. The growing momentum of the festival seems to have made the day immune to ongoing geopolitical events.
Alibaba’s extravagant annual gala to launch the day’s festivities included performances by celebrities including Taylor Swift and Asian singer GEM. This year, the Hangzhou-headquartered company also focussed on live-streaming on its platform, gaining significant traction in China. The event has become a modern form of must-see TV.
In fact, it has become such an important event that it’s now regarded as a bellwether for the Chinese economy, giving a glimpse of consumer sentiment in the country. This year, it gave an indication of sentiment in light of a potential tariff tussle that could dampen the world economy.
There had been concerns that US brands would get the cold shoulder from Chinese consumers, a boycott of US labels. This didn’t happen, and US brands finished in second place, behind Chinese companies. Other top countries selling into the event were, by gross merchandise volume, Japan, South Korea, Australia and Germany.
Of course, during and after the festival, there’s a huge task to deliver the orders. Alibaba’s logistics arm Cainiao had delivered 100 million items by 8:00 AM on the day of the festival. But it has a total of 1.3 billion to process. Sensitive to environmental criticisms of the festival, Alibaba has said it wants to fulfil the orders sustainably and so has designated 20 November as National Cardboard Box Recycling Day. It has set up 40,000 recycling stations in addition to the 35,000 set up by its express courier partners.
Alibaba, which has grown into an e-commerce behemoth, is looking to evolve into other areas. Jack Ma, the affable founder of the company, retired as chairman earlier in 2019 and passed on the mantle to Daniel Zhang. The new CEO wants to wean away Alibaba from e-commerce and build out its rapidly growing new businesses such as cloud computing, digital media and entertainment, and even offline retail.
Alibaba deserves credit for creating what’s becoming a global shopping day. Retailers around the globe are using the popularity of the event with coded discounts, many adding an additional 11.11% off.
The day of four ones, which began as a sort of anti-Valentine’s day, is bringing together retailers from all corners of the world for this special event.
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