POV: Double 11 Shopping Festival 2019

Background:

Monday saw China’s 11.11 / ‘Double 11’ shopping festival breaking records in its 11th year. More than 200,000 brands participated, with Alibaba achieving more than US$38bn in sales in 16.5 hours.

Details and Implications:

Singles’ Day is the biggest online shopping event of the year – consistently topping Black Friday sales. For its 11th year this year, Singles’ Day reached $12bn GMV (Gross Merchandising Value) in the first hour of sales for Alibaba, the country’s biggest e-commerce company and founder of the shopping festival. The total GMV from the day was $38.3bn, up 26% from last year. Alibaba said it achieved its first $1bn in sales in just 68 seconds and first $10bn in 30 minutes. But, whilst this year’s sales showed significant growth, this was slower than the 27% growth seen last year and the slowest growth the festival has seen so far.

What happened on the day?

The online shopping event was supported and promoted by local and international celebrities. Taylor Swift was the main talent in a countdown gala that launched the event and promoted brands and offers. Other celebrities such as Asian Pop icon GEM were also involved in promoting brands and deals throughout the event. Even US reality star Kim Kardashian announced that her KKW fragrance would be on sale on Tmall during the event this year and held a livestream to promote it. This demonstrated the scale of the global interest in the festival this year, with markets all over the world participating.

After China, the US was the second largest seller by GMV this year. Over 78 markets participated in the event, with 1 million different products being sold in the 24-hour window. The other top countries that sold to China during the event were Japan, UK, Korea, Australia, Germany, France, Italy, Canada and New Zealand. The top countries that bought items from China during the festival were Hong Kong, Taiwan, the US, Australia, Singapore, Japan, Malaysia, the UK, Macau and Canada.

The most popular item purchases in the 24-hour window were food supplements. Sales of toiletries were also strong. With 200,000 brands participating in the sales this year, some of the biggest sellers included L’Oreal and Nestlé. Other booming categories included electronics brands such as Huawei Technologies, Apple, Dyson, and Philips. According to Alibaba, 299 brands exceeded $14mn in GMV, including these electronics brands, as well as fashion brands such as Nike and Under Armour which were also very popular on the day.

Alibaba’s sales in China exceeded the total overall sales achieved on 11.11 in 2016, with 1.3 billion delivery orders. Part of this year’s campaign involved Alibaba’s attempts to reach lower-tier cities. Liu Xingliang, internet analyst at DCCI Data Center, said that effort had paid off. Xingliang said: “I saw them selling electronic toothbrushes at $1.42 and 65-inch TV sets at $257.36. People in lower-tier cities and towns can afford these products and in fact, they like big TVs more than city people, because they usually have larger houses.” Recently, China’s economy has slowed due to global and domestic headwinds, but it is thought that people waited for the festival to make large purchases this year resulting in the record-breaking statistics. Additionally, Chinese consumers are increasingly turning to smart speakers to shop online. More than 1 million orders were made via voice shopping using the Tmall Genie smart speaker, a 26% increase from 2018.

Summary:

Singles’ Day is seen as an indicator of consumers in China and their willingness to spend. This week 11.11 saw another record-breaking year but Alibaba’s new record comes as it faces a slowing Chinese economy and stiff competition from domestic rivals. While Alibaba is the name often associated with the mega shopping event, competitors JD.com and Pinduoduo all offer their own sales.

Further Reading: Tech Crunch | Business Insider | CNBC | Alibaba Group | Alizila | Watch the opening gala here