The Strategist

Alibaba's Bachelor Party: How to Make $ 14 Billion a Day

11/12/2015 - 11:41

As a result of yesterday's "Singles’ day" (Guanggun Jie), during which the Chinese Internet giant Alibaba annually arranges grandiose sales of goods, the e-shop broke its own record for revenue. Let’s recall where this holiday came from and how it drew Alibaba founder’s Jack Ma attention.

Live data streaming of Alibaba’s Singles Day sale on November 11, 2014.
Live data streaming of Alibaba’s Singles Day sale on November 11, 2014.
Last year, companies using the platform Alibaba, managed to gain $ 9.3 billion by selling 270 million units per night, or 3125 products per second. For comparison, it is nine times more than the most successful sale of the American online retailer Amazon’s, which was launched in the shop’s history anniversary (in July this year, the company celebrated the twentieth anniversary).

Analysts predicted sales of $ 11 billion even before yesterday's sale (by the way, the number was China's GDP in the early 1950s, according to the National Bureau of Statistics of China). Meanwhile, the numbers of this year beat both the market’s expectations and Alibaba’s own achievements. For the first half an hour, total price of the goods sold jumped to $ 5 billion - most of the purchases were made through mobile phones (69% of transactions). All in all, Alibaba system’s yesterday turnover amounted to $ 14.3 billion. Leaders of sales (among other things) are children's goods, food products, Nike sneakers and Levi's jeans.

November 11, 2009, Jack Ma launched the first test sale in the manner of US Cyber Monday and "Black Friday" and, apparently, was pleased with the result.

Initially, this informal and non-traditional for the country holiday was the invention of students from Nanjing, a sort of Chinese answer to Western Valentine's Day. People began to celebrate "Singles Day" in the 1990s: the combination of four units in the holiday’s date - 11.11 - makes it a fine day for dating, in the Chinese people’s view. Although, it is difficult to say how widespread would the new tradition have been without Alibaba’s creator. It is likely that even the Chinese superstitions and growth in the number of single Chinese (100 women/160 men of marriageable age in China, projected in 2030) would not have made the celebrations much popular.

In fact, any day is good for such purposes. However, it is better for marketing, when the day calls pleasant associations and stimulates consumer activity. It is believed that on November 11 single Chinese are particularly prone to shopping and practice what could be called retail therapy. In addition, beginning of a romantic relationship can serve as a good occasion for gifts like a latest model of a smartphone or a fashionable outfit. There is joke in China, that each year Alibaba just adds fuel to the fire-breathing dragon jaws of e-commerce in this cold autumn day. However, the dragon here is rather Alibaba Group, with capitalization over $ 200 billion, and sales continue to grow supernatural rapidly. Yesterday is just another confirmation for this.