Alibaba’s annual Singles’ Day shopping extravaganza generated 213.5 billion yuan worth of transactions as of midnight, validating its “digital economy” campaign that combines online and offline retail.
The grand retail event, also referred to as Double 11, was initially hailed as a shopping festival for single people, or “bare branches”. In less than a decade, it has developed into a shopping carnival with one billion orders and the biggest shopping event worldwide by total value of transactions. Double 11 is therefore regarded as a barometer of Alibaba’s e-commerce business and consumer sentiment in the second-largest economy of the world.
Based on Alibaba’s official data, in the first two hours after the big sale kicked off, the gross merchandize volume surpassed 100 billion yuan.
“We can see that the retail businesses are fully embracing the Internet and this has facilitated ‘consumption upgrade’,” Zhang Yong, the CEO of Alibaba Group, told Chinese media. Zhang is set to take over group chairman’s position from Jack Ma next year and the 2018 event reportedly was also used to test the Internet giant’s “new technologies” in cloud computing, logistics and mobile payment.
Confronting a slowdown in personal spending caused by a slowing economy and trade frictions with the United State and increasingly fierce competition from its top rival JD.com and smaller platforms like Pinduoduo, Jack Ma and his successor Zhang Yong have been trying to find new engines for Double 11’s double-digit growth.
Jing Jie, the president of Tmall, Alibaba’s successful online retail website spun off from Taobao, elaborated at a recent event that the group was trying to mobilize all its platforms, in a bid to make the shopping festival a real festival that includes catering and entertainment and combines e-commerce and big sales at brick-and-mortar shops.
It’s reported that 100 retail business districts and 200,000 offline shops were engaged in the 2018 Singles’ Day, among which there were 62 Intime Department Stores, 41 Easyhome stores, nearly 100 Hema stores and over 470 new retail supermarkets. Over the past 10 days, about 10,000 malls partaking in the used-to-be online event have found their value of transactions grow nearly 200 percent year-on-year.
“When we’re talking about new retail, we have confirmed online platforms and offline shops do not constitute two worlds isolated from each other,” Zhang Yong told state-run cnr.cn. “Everyone lives on the Internet and every consumer is also an Internet user. The two groups overlap each other. So, the key is to form a complete digital commerce world to combine the two channels.”
Zhang explained in the interview what’s important is not if it’s an online shop or brick-and-mortar mall. Instead, the key is if the retail transactions are all data-driven.
Alibaba originated from e-commerce, but today, we’ve transformed into a data company, Zhang elaborated. Data derived from real-life transactions on platforms like Tmall and Taobao constitutes foundation of the database. “We dig into the data, find valuable information and feed them back to retailing practice. It’s a virtuous circle and it makes data the center of our future business.”
Apparently, Alibaba, which has struggled to achieve good “gross merchandize volume” amid softening consumer demand, is now diverting its focal point of promotion to what’s called “digital economic system.”
“Consumer demand resembles an iceberg. If the part above the water are consumers, the part below could be consumption intent that failed to be materialized due to concerns over aspects like logistics and services,” Jing Jie was previously quoted by Chinese media. He pledged to resort to new technologies and retail in bid for more parts of the iceberg to surface above the water.
