By lunch time on November 11th, China’s most popular shopping holiday, online buyers in the country had already smashed the previous record for the number of e-commerce sales in a single day.
Singles’ Day, celebrated on the 11/11 because of the association between bachelors and the number one (ie. four singles), is designed for the younger Chinese generation to celebrate their bachelor lives. However, e-commerce companies popularised the holiday as a day for shopping, turning it into the biggest day on the calendar for e-commerce.
This year, Alibaba, China’s largest e-commerce group and chief promoter of Singles’ Day, beat the US$3.1bn recorded in sales last year by 1.04pm, which was more than double the US$1.46bn recorded during 2012’s Cyber Monday in the United States.
By end of the day, Alibaba had recorded US$5,7bn in sales exclusively through its payment system, Alipay, meaning the actual figure for the day will be even higher when all payment methods are eventually totaled up.
Despite being unarguably the largest seller on the shopping holiday, Alibaba is not the only company making big numbers. Gloria Li, a spokeswoman for Alibaba’s closest rival, Jingdong, said the company was selling the equivalent of one computer per second on Singles’ Day and that the sale of shoes was “through the roof”. However, Jingdong provided no exact figures to the public.
With these numbers, it’s impossible to be surprised by forecasts that China will overtake the US as the world’s largest market for e-commerce within the next two years.
According to McKinsey’s research, China’s revenue from online sales last year was between US$190bn and US$210bn, while the US revenue stayed just above at between US$220bn and US$230bn. The big difference rests on the fact that China’s market grew 120 per cent between 2003 and 2011, while the US market only grew 17 per cent in the same period of time.
McKinsey further forecasts that by 2020 China’s market could reach US$420bn-650bn, with revenue doubling or potentially even tripling.
It isn’t hard to imagine when taken into consideration that only 31 per cent of the households in China have broadband internet and 21 per cent have mobile broadband. As these percentages grow, online sales will most likely grow proportionally.
Surprisingly, Alibaba founder and chairman Jack Ma has expressed concern by the impact e-commerce is having on business owners and in the nation’s retailers. “Now, a lot of malls have more staff than customers,” he said, “Web shopping will cause local retail prices to come down, and then there’ll be price adjustment in the Chinese market.”
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