By: Gerald Steven
Alibaba makes record-breaking sales every year on November 11th, beating the number of sales made during Black Friday and Cyber Monday. But will this shopping celebration continue?
On November 11, Alibaba, China’s largest online shopping platform, made $30.8 billion in sales in just 24 hours. This online shopping spree, known in China as “Guanggun Jie”, was part of the country’s annual celebration of “Singles’ Day”, a holiday popular amongst young people that celebrate the pride in being single. It is now, obviously, also the biggest sale of the year in China.
Celebrating Being “Single”
Single’s Day’s origin is different from the origins of Black Friday or Cyber Monday. Singles’ Day was not a shopping spree celebration when it first appeared. The celebration first began in the 1990s as an anti-Valentine’s Day celebration when students at Nanjing University wanted to celebrate their single status. The organisers chose November 11th as the annual date of Singles Day because the four number ones are symbolic of being single.
In its early days, Singles’ Day was not synonymous with consumerism. The celebration only became a shopping holiday since 2009, when Alibaba saw the commercial opportunity in Singles’ Day. They began the annual trend by launching “Double 11” deals, which became widely popular after a few years.
Alibaba and Consumerism
At the first glance, Singles’ Day resembles the American holiday shopping tradition of Black Friday. But Singles’ Day is largely an online sale, which makes it more comparable to Cyber Monday. Although the online shopping celebration of Singles’ Day only began less than ten years ago, Singles’ Day has grown to be a celebration that is far bigger than Black Friday and Cyber Monday combined. In 2017, Alibaba made $25.3 billion dollar in online sales during Singles’ Day, while online sales during Black Friday and Cyber Monday were only $5.03 billion and $6.59 billion respectively. Singles’ Day is also bigger than Amazon’s Prime Day – Amazon’s biggest sale of the year. In July 2018, Amazon only generated $4 billion in sales from Prime Day.
Compared to last year’s sales, Alibaba’s sales during Singles’ Day in 2018 increased by 27%. China’s postal service also expected to ship over 500 million packages because of Singles’ Day orders. The amount of packages shipped in 2018 also increased by 50% from last year. While the numbers are charming for now, shadows have begun to shade the future of the celebration. The overall shopping frenzy and increase in sales might not last for long due to the change of the overall business environment.
The Future of Singles’ Day
China’s recent economic growth has been slowing down. The country’s large population of middle-class consumers are now spending less on consumer goods. Yang Sun, a 26-year-old from Xi’an, said that Singles Day discounts no longer enticed her to buy things that she wanted. Besides, they don’t prefer online shopping as much as they did, too. Wang Xin, a 24-year-old engineer in Shanghai also said that he rediscovered the joys of shopping in retail shops. “Singles’ Day just doesn’t hold that much appeal for me,” Mr. Wang said.
The ongoing trade war with China and the U.S. also affects China’s sales forecast. Because of the tariff imposed by the U.S., Alibaba decreased its sales forecast for the year by around 5%. It is unlikely that Alibaba will continue to generate record-breaking sales growth every year forever; growth will eventually decelerate.
In spite of China’s slowing economic growth, Alibaba’s creativity should not be underestimated. Looking at what Alibaba has done in the past, it will not be surprising if Alibaba comes up with a new shopping celebration. Steven Zhu, an analyst at Shanghai-based research firm Pacific Epoch, said “I’m not worried about Alibaba at all. These guys are really good at creating things from nothing.”
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