New record in terms of revenues from sale were set by Chinese e-commerce giants Alibaba and JD.com for the Singles Day shopping event with a total of $115 billion in sales across their platforms.
The Singles Day event, also known as Double 11 because it happens on November 11, was extended this time not by just a period of 24 years which also helped in the record sales numbers. The companies also engaged in promotions for the event for a longer period – from November 1 to midnight of November 12.
Over the 11 year period, a total of 498.2 billion yuan — or $74.1 billion, from its total gross merchandise value (GMV), a figure that shows the total value of orders across its shopping platforms, was generated by Alibaba, the company said. That number was 204.4 billion yuan higher than what the company had recorded in 2019.
Over the same period, transaction volume of 271.5 billion yuan ($40.97 billion) in total was generated by JD.com which was 204.4 billion yuan more than what the company had recorded in 2019.
This record sale comes at a time when there are signs of recovery for the Chinese economy after taking a beating because of the novel coronavirus pandemic.
But a fall in stock price of both Alibaba and JD.com essentially overshadowed the record sale after the releasing of draft rules by Chinese regulators that seek to define for the first time what constitutes anti-competitive behavior. There is a concern among investors that technology giants of the country will now be caught up in a very strict regulatory framework that can hit their businesses.
One of the most important focus for both Alibaba and JD.com were promoting foreign brands. Alvin Liu, the president of Alibaba’s Tmall import and export business had said in an interview last week that the company expected Chinese consumers who usually purchase foreign products, when they would otherwise go abroad but for the travel restrictions due to the pandemic, would be making purchases of foreign brands in the country this time.
Out of the 250,000 brands that were listed to sell their products in the Singles Day event this year, 31,000 were from overseas, Alibaba said. The company said that the top country selling to China by GMV was brands from the United States.
US brands accounted for more than $5 billion of Alibaba’s total $74.1 billion GMV, said Michael Evans, president of Alibaba.
“A China strategy and a digital strategy is going to be critical in the post-pandemic world,” Evans said in a television interview.
However, the idea of the Singles Day event is not only about driving sales. One of the most important aims is to acquire new customers for both Alibaba and JD.com and in recent year, the focus of the companies was on the so-called lower tier Chinese cities which typically are home to the more price-sensitive Chinese consumers. This strategy of reaching out to these cities is viewed as a critical part to their growth strategy by both the e-commerce giants.
“Many brands have come to realize the huge size of the Chinese market, so they customize products for lower-tier cities by leveraging JD’s data and our supply chain capabilities,” Xu Lei, CEO of JD Retail, said in an interview that was aired in the media on Thursday.
(Adapted from CNBC.com)