Alibaba’s Global Shopping Festival sees record consumer spending
Chinese e-commerce giant Alibaba saw an unprecedented response to its Global Shopping Festival this year, beating its record from 2019. The event is expected to offer a glimpse of consumer appetite in the world’s second-largest economy, which is bouncing back from the pandemic.
Alibaba’s Global Shopping Festival evolved from an unofficial holiday, started in 1993, to celebrate the lives of single people. In previous years, the event has been a 24-hour online sale in China that kicks off on 11 November. But this time Alibaba launched the festival early, with two primary discount periods, the first taking place from 1 to 3 November followed by the main event on 11 November. CEO Daniel Zhang said the company wanted to give consumers more time to shop and give merchants “more exposure and selling opportunities”, while “easing pressure” on the logistics infrastructure that takes care of delivering the astronomical amount of products sold.
This year, the festival — along with other Singles’ Day sales launched by other companies looking to mimic Alibaba’s success — was set against the backdrop of a pandemic that has ravaged the world economy. In China, the economy rebounded in the third quarter, with economic output and consumer spending topping their pre-pandemic levels.
In a testament to the growing power of online shopping, Alibaba racked up 498 billion yuan (about $75 billion) in gross merchandise volume from its event, almost doubling from 268 billion yuan (about $40 billion) a year ago. The company said it introduced more than 2 million new products, twice as many as in 2019.
To spread the reach of its event, Alibaba offered promotions not just for physical goods but also vouchers for eating out, travel, beauty and personal care, among others. It leaned heavily on livestreaming, enlisting celebrities and other influencers (or “key opinion leaders”, as Alibaba calls them) to draw hundreds of millions of shoppers to its retail platforms. Close to 400 company executives and 300 celebrities put on livestreams to drum up traffic to the Global Shopping Festival.
Other e-commerce companies such as Douyin, JD.com and Pinduoduo have also held their own Singles’ Day shopping events. The gross merchandise volume on JD.com, for example, reached 271 billion yuan (about $41 billion), up 33% from in 2019.
This year’s Singles’ Day events have shown resilience even though regulators in Beijing have proposed new guidelines to rein in the influence of leading Internet companies, whose services reach every aspect of life in China. The Global Shopping Festival came a week after Beijing halted the planned, record-setting IPO of Alibaba’s sister company Ant Group, citing the need for new regulations on financial tech. This could be seen as a sign of the Chinese government’s determination to curb the huge influence of digital behemoths like Alibaba and rival Tencent.
Despite this, Alibaba’s Global Shopping Festival and other Singles’ Day sales were clearly a success, showing not just China’s economic resilience, but also that the shift from physical retail to online shopping, accelerated by the pandemic, is sustainable and likely to see more growth in the future.
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