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China's $ 25 billion shopping festival declared – TechCrunch

This Sunday is November 11th, a good date in the Chinese tech community because it's the single's day, the world's largest online shopping day. This year is particularly controversial as it will be the tenth edition of the annual event – also known as Double Eleven – launched by Alibaba, the Chinese e-commerce giant.

The day of the individual is big business today. Alibaba sold more than $ 25 billion worth of goods last year, as 11.11 moved outside China to other regions in Asia and beyond. The company has continuously increased its sales compared to the previous year. It is therefore expected that trade will increase by $ 35 billion or more this Sunday, though there are doubts about the Chinese economy and a continuing trade war with the US.

We have dug into this phenomenon so that you are well prepared for what you expect this year.

What is it?

The event is similar to Black Friday and Cyber ​​Monday in the US, but 2.5 times larger than these two dates combined. Alibaba has a number of products on its online sales platforms, including the Taobao Marketplace, Tmall Shop for Brands, AliExpress International Services and, most recently, its worldwide operations. These include Lazada in Southeast Asia and Paytm in India, where Alibaba and Ant Financial are the main investors.

The sale includes obvious goods such as smartphones, televisions and other large ticket items, as well as fashion, clothing, furniture, health products and more. Among the less-anticipated products that are selling well are cleaning products, toilet paper and perishables. There is also a strong demand for cars.

Overall, Alibaba recorded 1

.48 billion transactions worldwide in the past year, peaking at 325,000 orders per second. His Alipay payment service had a turnover of $ 1.5 billion (1945,9007) and a total order backlog of 812 million (1945,9008). Meanwhile, 90 percent of sales were dominated by mobile devices – well ahead of the US, which reached 37 percent on Black Friday and 33 percent on Cyber ​​Monday.

Alibaba scored a record $ 25 billion at 11.11 in 2017 (Image via Alibaba)

Alibaba is also driving the festival into the offline retail industry, which keeps pace with its own business through its its own brand Hema and partnerships with major retailers in China, such as the tech giant Suning and the hypermarket, has been expanded into physical stores operator Sun Art. [201559002] It was renamed "11.11 Global Shopping Festival" in 2015 to mark Alibaba's efforts to promote the Increase sales outside of its core market in China, and last year they said they had more than 60,000 international brands with customers in more than 225 countries.

At the beginning

November 11th was not always synonymous with the purchase of discounted products online. The date first became known in China in the 1990s, when it was promoted to a bachelor celebration because it represented four "singles". Later it got a new day to celebrate relationships – it's a huge event popular date for marriages – and looking for potential partners.

The e-commerce component arrived in 2009, when a manager named Daniel Zhang used the date to promote Tmall, Alibaba's virtual shopping center for brands, in which only 27 dealers participated. Zhang, then in charge of the Tmall business, is now the CEO of Alibaba himself, and he will be chairman of the firm when Jack Ma – Alibaba's long-time figurehead – leaves the business forever next year.

Back in 2009, Alibaba earned around $ 7 million on the first single day. Speaking to CNN this week, he said he "never expected" that promotion would become such a big phenomenon for both Alibaba and the broader e-commerce industry.

Alibaba boss Daniel Zhang launched the 2009 single-shopping festival He was responsible for the company's Tmall business (Image via Vivek Prakash / Bloomberg via Getty Images)

Beyond Alibaba

As the singles day became a national celebration, other e-commerce players such as JD.com and Pinduoduo have also been involved in making use of a month of robust consumer spending. According to market research firm QuestMobile, on November 11, JD.com saw a 21.1 percent increase in active users for its mobile app.

The warm welcome of the event has also inspired the competition's festivals throughout the year. In 2010, JD.com, which ranked behind Alibaba in terms of transaction volume, held the single-day festival over a 12-day period and launched its own shopping event on June 18th. Suning, a major Chinese device The retailer turned its anniversary into a sales event on 18 August.

However, none of the latecomers have managed to reach the size of the single's Day, and Alibaba is expanding the line for the world's largest shopping event.

An 11.11 ad in New York (Image via Alibaba)

Not just numbers

The Singles' Day continues to grow every year, but sales have slowed. Gross commodity volume growth declined from just under 65 percent in 2014 to around 40 percent in 2017.

But Jack Ma was always interested in downplaying the importance of these numbers. In 2013, he told the Chinese media on the eve of November 11 that he had no sales figures. In the following years he repeated a similar message.

Rather than being true to scale, Ma said he was looking for "steady" growth. This is because shopping sprees require an overarching infrastructure to perform functions such as logistics and payments.

Ma's words are consistent with the company's ongoing search for potential partners to drive its retail ecosystem. Last year, Alibaba invested $ 717 million in Huitongda, which operates an infrastructure for online retailers to be sold to rural customers who also attend Singles Day.

Similarly, Alibaba's financial company, Ant Financial, has set up a number of payment solution companies globally in the bank to support the global reach of the e-commerce company, while the company's cloud computing department meets the requirements of annual sales of goods $ 25 billion. Then there is the logistics platform Cainiao Network, which handles 812 million orders placed in China last year.

With the Single & # 39; s Day, Alibaba has also taken over the tech technology on a large scale. Last year, they ventured into AR – Maybelline let customers virtually test the lipstick – Nike is among the brands that have used gamification to attract customers, and Alibaba's own Tmall service has chosen "virtual dressing rooms" to help sell clothing.

Offline Sales

Alibaba Chairman Ma also predicted what would become the day of the single today. "We want all e-commerce companies to be involved and to include all the stationary shopping centers," he said.

In 2016, Ma coined the term "New Retail" to describe a future of seamless integration between the two online and offline retailers. Last year, the offline push of the shopping festival began. This year, 200,000 brick-and-mortar stores have registered on Singles Day to give discounts to Alibaba's customers. For example, a user may receive offline offers when using Alibaba's Alipay e-wallet to pay at a mall. Alibaba also uses Alipay to award cash prizes at Red Wallet competitions.

Alibaba said last year that New Retail had "11.11" "promised," but said nothing. This year, Alibaba's physical advances in retail continue – it now operates more than 30 stores and includes face recognition – the offline component is more important than ever. In addition to the physical business of Hema and InTime, this also includes Ele.me and Starbucks deliveries and the rest of its local service platform.

Alibaba's 11.11 deals now include Starbucks coffee, which can only be ordered through Ele.me Delivery through partnership with the US coffee chain (Image via Alibaba)

Expectations for 2018

The forecast for the This year's single's Day 2018 is challenging as China is tariffed against the backdrop of China's economic struggles and the US Sino's trade warfare with billions of goods. However, the majority of Alibaba's sales will continue to be in China on both November 11 and the rest of the year. As a result, the US government is unlikely to make its mark on international growth despite the progress made.

Nonetheless, some key factors:

  • Slowing growth: Alibaba's quarterly revenue continues to grow strongly (up 40 percent), but the rate itself slows down, the same goes for 11.11
  • Offline: Alibaba undertakes a concerted offline retail push e-commerce saturation offset by more deals for those shopping in person
  • Services: The on-demand services and provisioning platform, valued at $ 30 billion will be playing a more significant role in China with 11.11 offerings
  • Payments: Alipay is expanding 11.11 deals by offering discounts to shoppers who pay via the app online or offline.
  • Global: Alibaba's international presence continues to grow and it is push 11.11 harder in Southeast Asia where it has established links with sellers in China, while it has now entered into cooperation in Russia and Pakistan / South Asia to work with

. In any case, Alibaba offers the world a real spectacle 11.11.

First, there's a star-studded entertainment show that takes place on the eve of the festival, and then you can expect constant updates from Alibaba's Twitter account during the 24-hour period. We'll keep track of the latest developments here on Techcrunch.com so stay tuned.

This year's 11.11 event is Alibaba's tenth and the last before Jack M's retirement (Image via VCG / Getty) Pictures)

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