Singles Day is the biggest online shopping event in the world as the clock strikes midnight and a huge array of products are available at substantial discounts with new promotions launched throughout the 24-hour period, according to a press release.
In the six Singles Day events so far, sales have grown from $15.75 million (100 million yuan) to $9.3 billion (57.1 billion yuan) as Alibaba founder and chairman Jack Ma’s prediction of reaching $15.75 billion (100 billion yuan) before the end of the decade looks more possible.
Last year marked the entry of foreign brands setting up shop on Alibaba’s two retail platforms, Tmall and Taobao. Hong Kong, the US and Russia were the three largest international buyers.
This year Alibaba is selling call options on products available during Singles Day so shoppers can reserve items at a specific price a few weeks prior to November 11. This strategy enables Alibaba to see which products will be most popular—a fine-tuning approach to massive monetization.
At the official launch today, Alibaba outlined its international strategy to serve as the “gateway to China” for brands worldwide. “There are currently 300 million middle class in China, and that number will rise to 500 million in 10 to 15 years,” said Ma, in the press release. “This will be an opportunity for every nation. China’s consumption power will rise quickly and that will not only drive China’s economy but also the world’s economy.”
Key estimates for the Singles Day Global Shopping Festival: 40,000+ participating merchants, 5,000+ participating international brands from 25 countries, and more than 6 million products available.
— Globalwide Media (@GlobalWideMedia) October 5, 2015
Beyond the 11.11 event, Alibaba is expanding its AliCloud cloud computing business with a second data center in Silicon Valley spanning 10 cloud services, having announced earlier this year that it was investing $1 billion in its cloud computing business and launching its first data center in Silicon Valley in March.
While expanding aggressively, Ma has had to reassure brands about counterfeit goods on its sites such as Tmall and reassure investors about the company’s growth outlook.
“Recently, signals of China’s economic slowdown have triggered widespread concern and, I believe, overreaction around the world,” Ma said in a letter to investors, as reported by Bloomberg. “I do not agree with the notion that consumption will decline as economic growth slows. It is inaccurate to think that the slowdown of the Chinese economy means that Chinese people are unwilling to spend.”
Meanwhile, JD.com, China’s second-largest ecommerce company, announced yesterday the opening of its first US research and development center in Silicon Valley focused on cloud computing, mobile applications and big-data infrastructure. In July JD.com launched US Mall on its website to meet the growing demand in China for American products.
But Alibaba’s lead in the US remains substantial and last month it inked a deal with the US Postal Service in anticipation of cross-border ecommerce reaching $1 trillion by 2020.
“The importance of Singles Day is not just about its status as the major annual shopping event in China,” reports TradingFloor.com. “Singles Day gives valuable insight into annual consumption trends in China, which is becoming more important since the government has targeted consumption to be the main driver of economic growth.”
Michael Evans, President of Alibaba, said in the release, “Over the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how we change the world.”