Alibaba Group Holding’s TMall.com platform is poised to chalk up a record online shopping extravaganza when it kicks off its eighth Singles’ Day gala on Friday.
Hundreds of millions of consumers are expected to put in orders over a 24-hour period, helping the company break last year’s record of US$14.3 billion in gross merchandise value of products sold.
An army of 2.68 million couriers will be involved to deliver an estimated 1.05 billion packages on the day, a 35 per cent rise from last year, according to a forecast by Wang Pinhui and Gong Li of Industrial Securities.
At the same time, competitors including JD.com and Suning.com will be riding on the day’s coattails to cash in as consumers empty their pockets for a day of madcap shopping.
“Alibaba has initiated an online shopping phenomenon, whipping traditional retailers to catch up,” said Jason Yu, general manager of market research firm Kantar Worldpanel China. “The impact goes well beyond the retail industry to the broader economy and the business operations in China.”
November 11, a day that lacks any religious or political association in China, had always been marked tongue-in-cheek as a celebration of singlehood as the four digits 11.11 resemble four sticks – guanggun, which means bachelors.
With deft marketing and a strong feel for the zeitgeist, Alibaba turned the day into 24 hours of frenzied online shopping that mixes consumerism with China’s internet boom, offering discounts of at least 50 per cent to attract consumers to its TMall and Taobao platforms. Alibaba, owner of the South China Morning Post, trademarked the day in 2012.
Consumers in the world’s second-largest economy responded with enthusiasm, helping Alibaba chalk up six successive years of growth in gross merchandise value.
The popularity of online shopping is also a game changer for China’s three trillion yuan (US$442 billion) retail market, forcing more brick-and-mortar retailers to put products online to cater to customers who are more likely to browse with a smartphone or computer mouse than with their feet.
Online sales made up 11.7 per cent of China’s total retail sales in the first nine months of 2016, increasing 26.1 per cent during the period and outpacing the growth in total retail sales, said National Bureau of Statistics official Meng Qingxin.
Up to 59 per cent of Chinese expected to shop more by smartphone, higher than the global average of 27 per cent, Accenture said in a November survey of 10,096 respondents.
Their spending power has attracted even the attention of Canada’s Prime Minister Justin Trudeau, who opened a pavilion on TMall’s platform to help Chinese customers place orders for Canadian lobsters and maple syrup.
“The continuous upgrading of retailing models to improve shopping experiences will further drive other competitors to catch up,” said Sun Fangting, a research leader at Euromonitor China. “China is increasingly a leader in the world about how to shop.”
The buzz in online shopping would spill over to retail sales offline, a fact that had been borne out by consumption data over the past three years, said Bank of Communications researcher Liu Xuezhi.
“While there may be a squeeze on other consumption on November 11, we will see more positive impact as it will create an incremental buying impulse,” Liu said.
The online shopping spree was like a whirlwind sweeping through the retail industry, said Yu.
“Advertisements on traditional media channels have already been hard hit,” he added.
Banks are also hitching a ride. China Zheshang Bank said its loans to e-commerce platforms surged to 2.08 billion yuan in the third quarter, more than in the first half, as online retailers prepared for the event.
Still, bunching up all of China’s retailing within a 24-hour period might squeeze expenditure in the rest of the year, said Kantar’s affiliate CTR, citing a survey of 3,248 respondents that found one in two shoppers cutting spending elsewhere to save up for November 11.