Dive Brief:
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Alibaba has concluded its 10th Singles Day, and the 24-hour blockbuster sale holiday broke yet another record, with gross merchandise volume rising 27% year over year to RMB213.5 billion ($30.8 billion), blasting past last year’s record $25.3 billion.
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The company boasted that its fulfillment network, Cainiao Smart Logistics, handled more than a billion orders, moving packages with the help of satellites, according to a post on the company’s Alizila blog.
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More than 180,000 brands participated, and 237 of them, including global businesses like Apple, Dyson, Kindle, Estée Lauder, L’Oréal, Nestlé, Gap, Nike and Adidas, the Chinese e-commerce giant said in a press release emailed to Retail Dive. But it wasn’t all big business: Some 200,000 mom-and-pop stores leveraged Alibaba’s Ling Shou Tong platform for their own Singles Day online sales, according to the blog post.
Dive Insight:
Talk of any weakening of the Chinese middle class has noticeably died down in recent months. Even as the previously torrid growth in China slowed a bit last year, it remains pretty hot, and the escalating trade war with the U.S. is unlikely to chill it.
"I think you have to understand Alibaba and what Alibaba’s doing in the context of the long-term secular trend that’s developing in China, which is the rise of the Chinese middle class," Alibaba Executive Vice Chairman Joe Tsai said in the blog post. "That trend is not going to stop, trade war or no trade war."
James Hebbert, UK managing director of Chinese online ad agency Hylink, agrees. "[W]e have immersed ourselves in China's digital landscape to better understand Chinese consumers' needs through data-driven insights," he told Retail Dive in an email, noting that the agency had predicted that Alibaba would reach $30 billion in sales this year. "We believe that this is largely due to the growth in the Chinese middle class consumers who are continuing to embrace digital. According to an [Organisation for Economic Co-operation and Development] forecast, China’s middle class will almost triple from 300 million to 850 million by 2030."
Alibaba is likely to break its record again next year, according to Hebbert. But it would be a mistake to chalk Singles Day’s overwhelming sales numbers up to the massiveness of China’s population, he also said.
"The success of Singles Day is not just down to the sheer scale of China. The Chinese attitude towards embracing digital innovation means that retailer's interfaces make it easy for shoppers to purchase things online," he said. "This all relates back to basic behavioural economics — the easier it is to buy something, the more likely it is that consumers will buy it."
That means that U.S. and European e-commerce businesses can "learn a lot" from Singles Day, he also said. "China is leading the way with O2O strategies and New Retail, ensuring a seamless offline to online shopping experience."
Alibaba’s "New Retail" stance involves blurring lines not just between on and offline sales, but also between retail and entertainment, part of an all-around effort to be wherever its customers are, no matter what they're doing. But the e-commerce giant touted the global appeal of the day as well, noting in its press release that more than 40% of consumers purchased from an international brand, and that the top countries selling to China included Japan, United States, South Korea, Australia and Germany.