Alibaba's (NYSE:BABA) Singles' Day Shopping Festival is like no other. It's a combination of commerce, entertainment and an exuberant celebration of consumerism.
Retail as entertainment is one of the hallmarks of Singles Day. A new word, "retail-tainment," was created just for that. At the gala counting down to the opening of the sale before midnight November 11, a cohort of top celebrities including Nichole Kidman, Pharrell Williams, Chinese movie star Fan Bingbing put on an extravaganza for a cheering audience. Jack Ma, Alibaba's charismatic founder, also made a surprise appearance as the "retail-tainment-in-chief."
It's almost like the Academy Awards, a New Year's Celebration, and the Superbowl all in one. During the countdown to Singles Day, consumers enjoyed "See Now Buy Now" fashion shows, and used interactive apps to download coupons, raffle tickets, gift certificates, etc. All this created excitement and anticipation for the sales to begin.
At the zero hour, China's newly-minted middle class consumers were all in. Consumers from other countries also joined the party. Within 24 hours, they splurged on $25 billion of purchases, a 40% increase from last year.
Here are the mind-boggling numbers that sum up the day:
140,000: brands participating in the shopping festival. This is more than a 40% increase from last year. Alibaba is using what they call "uni-marketing," a data driven marketing technique, to help brands target the right consumers. Major international brands that enjoyed success include P&G (PG), Estee Lauder (EL), Starbucks (SBUX), Bose, Nike (NKE), and Gap (GPS). Many small brands are also rushing in.
15 million: products listed. Top selling products were in wellness and baby products categories such as multivitamins, milk powder and diapers. This is no surprise as health and safety are top concerns of Chinese consumers. Products from Japan, U.S., Australia, Germany and South Korea were most loved by Chinese consumers.
812 million: orders made and are in the process of delivery in the next few days. Alibaba is experimenting a smart logistics practice using big data, which allows fast delivery from proximity warehouses/stores. The first order was delivered in 12.18 minutes of the purchase.
1.48 billion: payments processed through Alipay, and 90% were through mobile phone. China's mobile payment system is more sophisticated and way ahead of the West. Last year, mobile payments already accounted for 82% of Singles Day's sales. In comparison, only about 30% of shoppers on Black Friday used mobile payments last year.
$25.3 billion: sales within 24 hours, topping last year's record-breaking haul of $17.8 billion. To put this number in perspective, the total sales of Black Friday and Cyber Monday combined in the U.S. was $6.79 billion in 2016. Focusing on providing a personalized experience and intelligent recommendations for consumers may have contributed to this success. With an enormous amount of consumer data, Alibaba is exploiting AI technology to achieve this.
Since its launch eight years ago, Alibaba's Singles Day shopping festival, now rebranded as 11.11 Global Shopping Festival, has gown into the biggest shopping day on earth. It's not just shopping though, it's also a retail innovation. Last year, Alibaba was excited about integrating VR and AR into shopping. This year, the buzzword is "New Retail," which uses big data to seamlessly integrate online and offline activities.
Why this is such a big deal: China has more than 500 million middle class consumers. The total retail market was nearly $5 trillion in 2016. By 2020, China will account for about 60% of global e-commerce. Even as China's economy slows and consumer spending may be at its peak, for consumer products companies, if you win China, you win the world.
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