Earnings from world’s biggest shopping festival eclipses that of similar US events, raising hope that online sector will boost slowing economy
Sales on Singles Day, the world’s biggest shopping extravaganza, soared nearly 60 per cent from last year as Chinese consumers went on a massive buying spree on Wednesday.
E-commerce giant Alibaba, which started the online festival seven years ago, said Wednesday’s total sales came up to 91.2 billion yuan (USD$14.3 billion) – more than four times the United States’ earnings last year from its Black Friday and Cyber Monday sales events combined.
Last year’s Singles Day event saw 57.1 billion yuan in sales.
A new record in online transactions added vigour to domestic consumption, on which the Chinese authorities have pinned their hopes to boost the slowing economy. Alibaba said 68 per cent of transactions were made on mobile devices.
Mainland retail sales rose 11 per cent last month from a year ago, the fastest pace since January, the National Bureau of Statistics said yesterday. The strong online sector was a major contributor, economists said.
Premier Li Keqiang, a firm e-commerce supporter, sent his best wishes to Alibaba and other shopping sites ahead of Singles Day, the company said.
Lian Ping, chief economist of Bank of Communications, said retail sales had been picking up in the past six months, suggesting firm demand.
“More people are shopping online, especially on mobile devices. It’s not just the young generation now, but also those in their 50s or 60s,” Lian said.
“Once a new consumption habit is developed, it will be hard to change, so the online sector is growing like a snowball.”
Other factors driving the recovery were rebounds in the residential home market – which benefited businesses such as furniture and home-appliance retailers – as well the bull market for Chinese stocks between the second half of last year and the middle this year, Lian said.
This year’s Singles Day shopping festival has put the focus on globalisation – around 27 million Chinese consumers bought goods from 5,000 overseas merchants during the day, while people in more than 230 countries also made orders online from Alibaba’s market places.
The participation of foreign brands in this year’s festival drew attention as the New York-listed Alibaba eyed a broader, more global market.
“We believe Singles Day … will go global. In the next five years, I believe it may be in Tokyo, Paris or New York,” Alibaba founder Jack Ma Yun said.
“Singles Day has shown the power of China’s consumers … This big shopping day is just a small engine to open up the huge potential of China’s domestic demand. We believe the number of middle-class people in China will grow from 300 million to 500 million over the next 15 years. Their demand for high-quality services and products will be more than enough to boost the country’s economy.
“We have great confidence in China’s economy as always. The coming five to 15 months might be a difficult time. But the next five to 15 years will be a great development era for the country.”
Alibaba Group president Michael Evans said: “Consumption in China is changing and it’s on the rise … Disposable income is rising. [Consumers] are buying more and saving less.
“There’s a growing influence of the internet … People are looking for different life experiences that in many cases cannot be satisfied by domestic businesses.”
Evans expected China to become the largest online market for imported goods within five years, adding that fresh food was now particularly popular among Chinese shoppers.
Jasmine Xu, vice-president of Procter & Gamble Greater China, said its T-mall sales exceeded expectations. “At 3.50am today, our sales reached the total sales we recorded during last year’s Singles Day event,” she said.
Pierre Combaz, Asia-Pacific vice-president of audio equipment maker Bose, said China was now one of its top three markets.
“The Singles Day shopping festival is a very important period for us to reach Chinese consumers,” he said.
In celebration of this year’s shopping extravaganza, Ma and other members rang the New York Stock Exchange Opening Bell remotely from Beijing’s Water Cube stadium, where the company hosted a gala show.