0 to $10 billion in 60 minutes: The Story of Alibaba Singles Day Marketplace Success
On November 11, 2018, Alibaba smashed its own record for the online retail Singles Day on topping $30 billion over a 24-hour period Sunday, soaring past its 2017 record of about $24 billion. Industry observers around the world were quick to point out Singles Day strong start with sales surging ahead to hit $1 billion in one minute and 25 seconds. Together, the Alibaba Groups various shopping platforms broke the $1.44 billion (10 billion yuan) sales threshold within the first two minutes and 5 seconds.
The World’s Largest Retail Event
In one hour, the sales exceeded $10 billion and the number of delivery orders surpassed a billion. According to Ecommerce expert Tom Godwin, this one hour sale was the equivalent of 6 months’ worth of all online shopping in the UK. At its peak, Alibaba Singles Day clocked more than 350,000 transactions per second.
The final tally on Alibaba sales registers closed in at $30,802,477,608, an increase of about 27% over last year’s total at current exchange rates. Also to be considered are the market realities that operates in 2018: China’s slowing economy, new ecommerce rivals and the current trade impasse with China’s largest trading partner United States.
Daniel Zhang, Alibaba Group CEO, started the Singles’ Day shopping festival in 2009 when he was in charge of the company’s Tmall business. Speaking to CNBC, Daniel put Alibaba’s focus on online retail and Singles Day 2018: “When we talk about new retail, we strongly believe that online commercial world and offline brick mortars are not separate worlds. And if you look at the customer base today, everyone is living in the internet. Everybody is the internet user. You have the same customer base. You must have the same commercial world. It’s all about how to innovate online and offline to a whole digitalized commercial world.”
About Singles Day
Singles Day is an informal holiday in China celebrating people not in relationships. Its date — November 11, — is meant to symbolize ‘singletons’.Alibaba started offering Singles Day discounts in 2009 and has since turned the day into a 24-hour bonanza of online shopping in China. Today the event is popular outside China especially in countries like Korea, USA, Singapore, Malaysia, Indonesia, Thailand and Vietnam.
While China offers the largest market for Singles Day, the top three countries from which Singles Day shoppers bought products this year were Japan, the United States and South Korea. Significantly, imported goods made up for a significant amount of Singles Day sales. Research firm Oliver Wyman survey recently revealed that 57% of consumers expect to buy overseas goods during the Singles Day event. In terms of US online retail, Alibaba’s Singles Day regularly accounts for bigger sales than Black Friday and Cyber Monday put together.
Marketplace Lessons from Singles Day
So, what can we learn from the global success of Alibaba Singles Day? We learn first that marketplaces are the future of Ecommerce. Like Alibaba, you can create your own marketplace opportunities like Singles Day. Owning your own marketplace gives you the nimbleness and flexibility for you to move quickly into new areas to take advantage of trends and seasonal opportunities.
With a marketplace, you can cross sell and up-sell creating new customer markets and profitable product categories. Most importantly, a marketplace helps you go beyond the traditional retail model to create a top notch customer experience and responsiveness.
The Alibaba Group is using Singles Day to test the limits of its cloud computing, delivery, and payment capabilities as well as try out new business endeavours. The total gross merchandise volume (GMV) for this year’s Singles’ Day – or the value of total transactions on platform – is keenly watched as a barometer of consumer spending and retail health in the world’s second-biggest economy. The Alibaba Group surpassed the 2017 Singles’ Day record with more than 8 hours to go before the end of the 24-hour shopping festival. So it is official now. Alibaba Singles Day is the world’s biggest retail event.