Author(s): Raghu Gopal
Each Singles Day event in China hits a staggering sales record. This year, Alibaba's platforms, Tmall and Taobao, generated $25.3 billion in sales during the shopping festival, an amazing sum and an impressive 39 percent rise on the $17.8 billion recorded in 2016, which was a 32 percent improvement over 2015. It took less than two minutes to exceed $1 billion in sales, an indication that shoppers were ready and waiting for the virtual doors to open. Sales from the Singles Day event easily surpass those from Black Friday and Cyber Monday in the US combined, and the figure is slightly larger than the annual gross domestic product of Estonia.
Singles Day, held every year on 11 November, started as a jovial take on being single. Originally a sort of inverse Valentine's Day, it has become the largest online shopping event on the planet. Relationship status is now completely unrelated to Singles Day, which Alibaba is repositioning as a Global Shopping Festival.
To help promote wares, Alibaba hired public figures including Nicole Kidman, Pharrell Williams and Maria Sharapova. However, the company's chairman, Jack Ma, who stood on stage with the stars, has become as much of a celebrity in China.
Another pattern Alibaba has established is the use of technology to help reinvent retail. In 2016, the company used virtual and augmented reality to add a new layer to the shopping experience. It enabled customers to explore digital-world replicas of stores in 360 degrees, inspecting and choosing products to add to their baskets (see The Lonely Hearts Club Brand).
At this year's event, the Chinese giant launched an in-store fashion consultant powered by artificial intelligence, called FashionAI. Shoppers stand in front of a large display inside a store holding a piece of clothing they're interested in. The system generates and shows a list of other articles of clothing in a similar style. Customers can tap on the screen to have a clerk bring the item. Alibaba has installed the technology in 13 stores in China as a trial. In the longer term, this could give Alibaba a presence in bricks-and-mortar shops.
The day also presents huge logistical challenges, owing to the high volumes of goods sold. By now, Alibaba will have delivered 812 million parcels through the Cainiao delivery network. Such a spike in activity is also a good advertisement for the resilience of Alibaba's cloud service, which processed 325,000 orders per second at its peak during the event.
To be clear, Singles Day isn't just an Alibaba event, and other companies also reported large numbers. Rival Chinese e-commerce company JD.com announced that its transactions reached more than $19 billion, rising over 50 percent from 2016. However, JD.com extended its Singles Day from 1 November to 11 November. Amazon, too, was quick to learn from the approach and introduced its Prime Day, which takes place in July.
These are amazing sales figures and they show a growing appetite for consumption in China. It's also further evidence of the ability of these e-commerce heavyweights to handle phenomenal volumes. Alibaba in particular continues to demonstrate both technical prowess and vision, as well as an impressive marketing aptitude. It knows how to throw a party and build up an event to something incredible.
An infographic, produced by Alizila, conveying the impact of Singles Day 2017 is available here.