One of the world’s largest companies, Alibaba (NYSE:BABA), is also one of the world’s largest retailers. Alibaba itself is a wholesale marketplace where manufacturers can sell direct to consumers or distributors if they want, but they also have two retail websites that are subsidiaries that have been preparing for a Chinese Holiday known as Singles Day or 11/11 (1111). This is essentially a day that the Chinese have dubbed as a day to treat themselves and as a result many Chinese buy more things on this day than they do even for Chinese New Year.
This year’s Singles Day was preceded by weeks of sales and lay-away style purchasing, which skews how Alibaba’s sales figures are reported. They essentially cram 3 weeks worth of sales into a single day, which happens to be a holiday of sorts. As a result, Alibaba is able to concentrate their sales in a way to crush any and all sales made by other retailers and marketplaces. Between Alibaba’s own Taobao and Tmall the company reportedly was able to generate almost 57 billion yuan or $9.3 billion in sales, far surpassing anyone’s expectations. IDC had expected something closer to $8.65 billion in sales and Alibaba had put their expectations at $8.2 billion for Singles Day. These numbers are in contrast to 2013 when Alibaba reported $5.75 billion in sales (already bigger than Cyber Monday) and $3.04 billion in 2012. In fact, even in 2011, Alibaba had already managed $820 million in sales on Singles Day, which really shows you the meteoric growth of Alibaba and Chinese consumerism.
Alibaba’s overall sales are measured by the gross value of all products sold rather than the revenue they generate from sales, which is much smaller. Most of the brands and products on Alibaba’s sites are Chinese of nature, but recently they’ve allowed for foreign brands to sell in addition to Chinese brands, which has helped US brands increase their sales in China and increase Alibaba’s overall sales figures. The reality is that people are willing to pay extra for genuine Nike, Adidas and other brand names that simply cannot be replicated in China. Even so, this shows the power of China’s ecommerce and the fact that billions of dollars worth of purchases were made over smartphones alone is showing the importance of mobile sales and apps across the world.