Chinese e-commerce leader Alibaba broke its one day sales record “Singles’ Day” (November 11th) with more than $17 billion by the end of the day, 82% of total sales were made through wireless devices.
Singles’ Day – a festival founded by Chinese students in the 1990s - was designed to celebrate being single. Its popularity has grown in recent years with Alibaba using it as a promotion vehicle to drive online and now mobile commerce.
Singles’ Day’s impact now reaches beyond China; Alibaba has more than 40 million international users and Singles’ Day promotions were open to more than 200 countries and supported 18 currencies.
How Alibaba turns a made-up festival into its sales opportunity
Singles’ Day is not an official festival in China; it is mainly celebrated by young people, often students who are active on the internet including fashion followers who are heavy users of social media and online shopping platforms. They are valuable target customers for Alibaba, and are attracted to online and mobile shopping through an internet event related to an entertaining festival, big promotions and celebrity endorsements. Alibaba’s huge scale in China gives it the power to gather numerous online merchants to offer big sales events to better meet its audience’s needs. Alibaba started its Singles’ Day promotion in 2009 and exceed initial expectations; Singles’ Day has since grown into an international online shopping festival. Unlike other festivals, Alibaba uses Singles Day as an opportunity to encourage people to make purchases to treat themselves rather than gifts for others.
As people aged 18-30 are the first or second generation of internet users in China, their shopping behaviours can influence their families’ attitudes towards online shopping, now more middle-aged and older are starting to use online shopping and take advantage of Singles’ Day deals.
82% mobile sales shows the deep penetration of mobile commerce
According to Alibaba, mobile sales have increased from 24% to 82% of total Singles’ Day sales from2013 to 2016. Mobile growth has been driven by the rapid adoption of smartphones but is also due to the interoperability of Alibaba’s online (taobao.com & Alipay) and mobile platforms (Alipay), and the expansions of Alipay’s in-app and in-store mobile payments service.
Alipay’s platform covers education, utility bills, charities, and entertainment, as well as being accepted in physical stores in China. Alipay’s strong partnerships with 170 banks ensure it has a wide and growing base of addressable users (Alibaba counted 450 million mobile users in Q3 2016). This in turn attracts more merchants to join Alipay, which has developed as an integrated mobile payments platform.
In terms of mobile commerce competition, Tencent’s WeChat is the biggest rival for Alibaba in China. As it not only has mobile commerce platform, but also developed messaging and chatbot payments services to offer a better shopping experience on mobile devices. International players such as Apple Pay and Samsung Pay joined the Chinese market in 2016; they still focus on developing partnerships with banks and merchants to increase service availability and user adoption and are more focused on the in-store payments environment than offering an integrated commerce platform.