Alibaba smashes Singles Day sales record rakes $5b in first hour

Alibaba’s 2016 Singles Day is off to a great start. The company broke RMB 10 billion (US$1.4 billion) in less than seven minutes, and had broached US$5 billion before the first hour was up. As was the case last year, a big majority of the day’s sales – 84.3 percent so far – are coming from mobile devices.

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Alibaba smashed its Singles' Day shopping record on Friday by clocking growth of more than 32 percent. It released the official figures for this year which states it sold a record $17.7 billion in products on Singles Day 2016. Last year, the 24-hour e-commerce sales event racked up $14.3 billion GMV in total.

"Back in 2013, $5.14 billion was our one-day GMV. Now we can achieve it in one hour," said Alibaba Group CEO Daniel Zhang, adding that in the first hour of Singles' Day, orders were coming in 175,000 per second.

Earlier media reports had forecast GMV from Alibaba's 11.11 Global Shopping Festival, as Singles' Day is officially called, to come at $20 billion in 2016. The figure easily eclipsing the $2.74 billion and $3.07 billion respectively generated online during the Black Friday and Cyber Monday sales in the U.S. this year. The early figures also include preorders customers made at promotional events earlier in the year to lock in Singles Day deals. Alibaba says the number of preorders was particularly large this year, “so much so that some Alibaba officials were talking about how the 24-hour sale had become a 24-day affair.”

How Singles’s Day turned into a shopping extravaganza          

Alibaba turned Singles’ Day, a pre-existing holiday that serves as an anti-Valentine’s Day, into a shopping event back in 2009. This year, Alibaba has made its Singles’ Day sale even bigger with new marketing gimmicks, including virtual reality, the see-now-buy-now model and omni-channel elements.

An Eye for Global market

More than 14,000 foreign sellers participated in Singles’ Day on Alibaba-owned online stores Tmall and Taobao this year. They accounted for more than 30 percent of the company’s overall Single’s Day sales, according to the company. First-timers include Shanghai Disneyland, Burberry, Sephora, Target, Maserati, Apple and Victoria’s Secret.Also, Alibaba opened the event to consumers in Taiwan and Hong Kong for the first time, and plans to bring Singles’ Day to Southeast Asia next year.

 “This is not just about brands from all over the world selling things to China, and it’s also about Chinese companies selling their products to consumers all over the world,” said Mike Evans, Alibaba president, in his interview with Bloomberg.

New Marketing Strategy

Alibaba experimented with new ways this year for consumers to interact with brands, including through augmented reality, virtual reality, and live streaming. “All sorts of different ways we haven’t yet tried in the past are used,” said Evans.

A week before Singles’ Day, Alibaba live streamed an eight-hour fashion show in Shanghai showcasing 80 international brands. Viewers could pre-order the designs from luxury fashion houses like Burberry that they saw on the catwalk. The company also developed a Pokémon Go-like mobile game where players could catch different branded “Tmall Cat” mascots and then redeem them for prizes and discounts.

VR payments: As part of Alibaba’s “Buy+ VR” plan, consumers could either wear a VR headset or a VR cardboard or make a purchase by staring at a floating “Buy” button in the VR environment.

The buzz was good branding and Alibaba is ensuring 11/11 continues being a much awaited flagship event.

Bridging the online and offline gap

Singles’ Day offers didn’t only take place online but also offline. Taobao and Tmall sent out many digital coupons on Singles’ Day, and those coupons were valid for purchases at participating brands’ physical stores as well. For instance, on WeChat, Uniqlo offered select designs at 50 percent off both on Tmall and in-store. Some of the offers are still available after Singles’ Day.

It is a successful campaign where brands can capture more of the Singles’ Day traffic for themselves instead of only through the e-commerce platform.  

More than e-commerce

The event was more than just shopping, it was a mass participation of people into an event evolving into a reason of celebration. A lot of people tuned in to live broadcasts for products and hundreds of thousands followed internet celebrities who use these platforms to sell. Jack Ma feels they are transcending the definition of an e-commerce entity.

 “Alibaba is not lacking engineers or customer service representatives. We need economists, sociologists, people with integrated knowledge to deal with challenges,” Ma said. Certainly, Alibaba is using technology and data to converge online and offline retail to move beyond simple transactions.