Singles Day, which is Monday, Nov. 11 this year, has become one of the biggest eCommerce events around the world, thanks to its backing by China-based digital and mobile retail giant Alibaba, and the disposable income of that country’s massive consumer segment. And this year’s event was reportedly setting its own new spending records, hitting a record $38.4 billion.
The gross merchandise value (GMV), which shows Alibaba’s sales across all its eCommerce platforms, blew past 2018’s record of nearly $30.5 billion, according to CNBC. Within 90 minutes, Alibaba’s GMV soared past $12 billion and exceeded the total reached on Singles Day in 2016. The 11th annual Singles Day — also known as the Double 11 since it falls on Nov. 11 — kicked off at midnight in Singapore and Hong Kong with deep discounts on the eCommerce site.
“During the 24-hour period, which began at midnight in Singapore and Hong Kong, Alibaba offered huge discounts across its e-commerce sites such as Tmall,” according to that report. “Alibaba’s Singles Day sales last year exceeded the spending by consumers during any single U.S. shopping holiday such as Black Friday or Cyber Monday.”
This year, Alibaba offered more discounts and live-streamed on its site to boost spending. Live streaming with online personalities is a big part of the eCommerce shopping experience in China. Last Wednesday (Nov. 6), for example, Kim Kardashian launched her new fragrance KKW during a live stream on Tmall.
Alibaba’s sales record happened amid a sluggish Chinese economy and increased eCommerce competition. Rivals JD.com and Pinduoduo also participated in the sales event, along with some eCommerce sites in Southeast Asia. JD.com started discounting ahead of the actual Singles Day event.
That’s not all that’s happening in China as Singles Day shopping took place. Research firm Sanford C. Bernstein says affluent Chinese consumers are not indulging on luxury and non-essential goods, Bloomberg reported on Saturday (Nov. 9).
Bernstein luxury goods analyst Luca Solca said the lowered interest by affluent Chinese customers could reduce the capabilities of premium companies. He indicated that “political monetary policy intervention” was needed amid the “lack of progress” in U.S.-China trade talks.
The firm’s two-week trip to China concluded that luxury spending might have plateaued. Solca also pointed to the effects of the Hong Kong protests and said it would likely continue into the first half of 2020.
Solca said he expects that a “polarization” among brands will probably continue, and anticipates that LVMH brands like Louis Vuitton and Christian Dior would be among those maintaining “the upper ground.” The slowdown of spending could also have a negative impact on stocks that have had a strong run.
Valentino, Bottega Veneta and Burberry can all be found in the Luxury Pavilion section of Alibaba’s Tmall site. Participation in the site is growing every year, and in 2018, 26 percent of tracked luxury fashion brands had a store on Tmall, an increase of 7 percent from 2017.The move is partly due to China’s shopping habits, as many Chinese consumers prefer third-party sites that offer a multitude of brands. This approach can be challenging for luxury brands, which prefer to sell through their own platforms.
Shoppers in China also like to use apps, and Alibaba and JD.com are on the cutting edge with their technology. There is also a huge growth opportunity for luxury brands in the country, as only 5 percent of luxury purchases are made online in China.
China is, of course, a hotbed of eCommerce, and the trends experienced not only on Singles Day but in the months to come will influence the global retail economy.