Alibaba’s ‘Singles Day’ sales near $9 billion, bigger than Black Friday By Jennifer Booton Published: Nov 11, 2014 9:18 a.m. ET SHARE How Alibaba answer to Valentine’s Day grew bigger than Black Friday Reuters Jack Ma manufactured a holiday that is bigger than Black Friday and Cyber Monday combined. NEW YORK (MarketWatch) — China’s anti–Valentine’s Day has handily surpassed the U.S.’ s Black Friday as the world’s most lucrative online shopping day, and with the company nearing $9 billion in sales, it is well on its way to becoming the most profitable manufactured holiday in history. Alibaba Group BABA, -2.72% the largest e-commerce company in China, surpassed more than $2 billion in sales volume processed through payments app Alipay within the first hour and 11 seconds of Nov. 11. As of Tuesday morning (around 10 pm local time in Hangzhou China, where Alibaba is headquartered) sales had surpassed $8.6 billion, with 42.6% generated from mobile, according to Alibaba. Locally, there are still two hours left in the day. Known as “Singles Day” in China, the holiday was invented by Alibaba in 2009 as a play on a two-decades-old celebration of China’s bachelors. Since then, Alibaba’s Singles Day sales have grown at a meteoric pace, skyrocketing a whopping 5,740% from 2009 to 2013. Alibaba, which heavily promotes Singles Day, had expected to ring up 50 billion yuan, or a record $8.2 billion, for the day. Industry tracker IDC said it was “very likely” Alibaba would reach $8.65 billion, up from $5.75 billion in 2013, $3.04 billion in 2012 and $820 million in 2011. That would make Singles Day one of the most successful — and lucrative — manufactured holidays in history. As the day neared close in China, Alibaba said total gross merchandise volume had exceeded 2013 desktop online sales from Thanksgiving through Cyber Monday 2013. More than 200 million logistics orders have been placed. Originally called “Bachelors Day,” the holiday was invented in the 1990s as a sort of response to Valentine’s Day. Alibaba took the reins in 2009, encouraging retailers to offer steep discounts in what would eventually morph into a weeks-long shopping event that peaks on Nov. 11. This concept of reinventing holidays is nothing new. Brands have become dependent on such so-called Hallmark holidays as Valentine’s Day and Sweetest Day that push people to spend. SunTrust Robinson Humphrey analyst Rob Peck, who reiterated his buy rating on Alibaba on Monday, says he expects 2014’s Singles Day to generate more sales than this year’s entire U.S. Cyber Week, which follows on the heels of the Thanksgiving and Black Friday holiday-shopper kickoff. Last year, U.S. consumers spent $2.9 billion globally online during Black Friday and Cyber Monday, according to ComScore. Singles Day is a long way from measuring up to the U.S. holiday shopping season in its entirety, which generated sales of more than $48 billion in November and December 2013, according to ComScore. But it is growing at an unprecedented pace. Partially driving this year-over-year Singles Day growth is the fact that Alibaba’s Tmall recently began allowing foreign brands, such as Costco Wholesale COST, -0.20% and Tesla Motors TSLA, +3.38% to reach Chinese consumers directly through its network. Alibaba CEO Jack Ma said Singles Day deals will reach consumers in more than 220 countries this year, with global suppliers from more than 20 countries participating and Tmall facilitating transactions from more than 27,000 sellers in total. The day’s wild success and cross-border expansion has naturally piqued the interest of Alibaba’s local rivals. Tencent 0700, +1.51% strategic partner JD JD, -0.95% and Suning were both expected to offer “doorbuster deals” this year on Singles Day for the first time. While Alibaba is attempting to expand Single’s Day abroad, Cantor Fitzgerald analyst Youssef Squali noted there has been increased competition from competitors attempting to copy the ..
Posted on: Tue, 11 Nov 2014 15:38:41 +0000
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