Alibaba Group Holding Ltd . kicked off its annual Singles’ Day shopping bonanza, logging $8.6 billion in sales within the first hour.
Shoppers from at least 192 countries and regions swarmed the e-commerce monster to scoop up discounted lobster, iPhones and refrigerators, at a rate of as many as 256,000 transactions per second. The Chinese company hosted a star-studded jamboree recruiting tennis superstar Maria Sharapova and American rapper Pharrell Williams to pump sales. As the event got underway, 93 percentage of transactions were done via mobile.
Analysts are expecting another record period on Alibaba’s platforms, with Citigroup Inc. predicting a 31 percent rise in transactions to 158 billion yuan ($ 23.8 billion ). While that’s only half of last year’s growth rate, it still dwarfs other events such as Black Friday and Cyber Monday. Billionaire founder Jack Ma is applying this year’s event as a testing ground for his plans to revamp China’s$ 4 trillion traditional retail sector with technology, an experiment that could help the behemoth gain an edge up China’s saturated retail market.
” The run that’s been done in the integration of offline and online , not only to its implementation of the technology integration, but the data and effectiveness for brands and “consumers interests” through personalization has been enormous ,” Alibaba President Mike Evans said in an interview on Bloomberg TV.” We read potential impacts of it in our day-to-day business .”
Nov. 11 emerged as a counter-cultural antidote to the sentimentality surrounding Valentine’s Day. It takes its epithet from the way the date is written numerically as 11/11, which resembles” bare limbs ,” a local face for the unattached.
Now, it’s become an excuse for people to shop and binge on amusement shows. Hangzhou-based Alibaba is applying the occasion to test the limits of its cloud computing, delivery and payments divisions — industries that could benefit from roping in traditional retailers as customers.
To that aim, Alibaba squads fanned out in all the regions of the commonwealth ahead of Nov. 11 to help outlets — some 600,000 mom-and-pop convenient storages and some 1,000 brands — upgrade their computer systems. Those retailers, many in prime metropoli places, will be coming delivery and storage centers.
To connect a 10 th of China’s 6 million convenient storages to the internet, Alibaba employs an app called Ling Shou Tong, meaning” connect retail .” Convenience storages are furnished propositions on what to procure and how to display merchandise. The goods are shipped from dedicated Alibaba warehouses, obviating the middlemen they would otherwise have dealt with. In assumption, that improves their profit.
The company is also converting 100,000 retail outlets into so-called smart stores. Brands including Levis and L’Oreal are taking part. If one store runs short on certain inventorying, patrons can track accessibility at other locations. They can also get goods delivered to their home.
Rivalry With Amazon
It’s early days in Alibaba’s grand retail experimentation, but if it operates, it could deepen a lead over Jeff Bezos‘ Amazon.com Inc . in the fragmented world of physical retail. Ma’s company spent billions buying into grocers, shopping center and even department stores times before Amazon announced its $13.7 billion acquisition of Whole Foods Market Inc .
Alibaba is already starting to see the initiative trickle into the top line. Revenue from new retail — principally its Hema supermarkets and Intime department store— more than quintupled in the September quarter. As with convenience store, Alibaba is trying to franchise the Hema model that combines a supermarket, restaurant and fulfillment center in a single location on its engineering platform.
The company lately bought control of the unprofitable delivery business Cainiao Smart Logistics Network Ltd. It oversees a coterie of more than a dozen shipping partners, orchestrating deliveries carried out by millions of people across more than 600 metropolis. Alibaba has said Cainiao expects 3 million people to manage packages during the 24 -hour-period, also known as 11 -1 1.
” On the back of 11 -1 1, we will probably have to distribute north of 700 million bundles ,” Evans said.” That is a massive, massive number of bundles that requires a robust logistics network both in China and outside of China, and we will continue to invest in that business, and by moving to a controlling position, we will be able to ensure the right degree of quality .”