Chinese shoppers turned out in force for this year’s Singles Day, according to updates from JD.com and Alibaba Group.
Singles Day sales rose as the Chinese middle class went shopping
Alibaba Group, whose retail ecosystem includes the Tmall and Alibaba marketplaces as well as a range of multichannel stores. said gross merchandise volume (GMV) to the tune of RMB213.5bn ($30.8bn/£23.8bn) was paid for via its Alipay payments arm during the course of the event. That’s 27% up on the same time last year.
Alibaba executive vice chairman Joe Tsai said: “I think you have to understand Alibaba and what Alibaba’s doing in the context of the long-term secular trend that’s developing in China, which is the rise of the Chinese middle class.” Referring to the ongoing US trade war with China, he added: “That trend is not going to stop, trade war or no trade war.”
Meanwhile, leading Chinese retailer JD.com said that sales worth a record RMB159.8bn ($23bn/£17.bn) took place via its business. That’s up by 26% on the RMB 127.1 billion reported last year.
International brands benefitted
More than 40% of shoppers buying from Alibaba Group shopped from international brands. Alibaba said the top countries selling to China via its platforms were Japan, United States, South Korea, Australia and Germany. In all, shoppers bought from brands hailing from 230 different countries and regions. Alibaba also said that its Caniniao logistics network processed more than a billion delivery orders, and that more than 180,000 brands took part in the event. Of those, 237 made more than RMB100m GMV – including Dyson, Apple, Kindle, Estée Lauder and L’Oréal.
JD.com said that brands including Apple, Dell, Dyson, L’Oreal and Pampers saw “impressive sales performance” with products from the US, Japan, Germany, the Netherlands and South Korea especially popular. Lei Xu, CMO of JD.com and CEO of JD Mall said the change had come as shoppers became willing to spend more. “There is a noticeable shift in China towards quality over price, which we see in the growing numbers of consumers who are willing to pay more for branded and imported goods,” he said. “By establishing trust with consumers and brands, thanks to our zero-tolerance policy towards fakes and our innovations in areas such as blockchain traceability for product safety, JD is in a unique position to set that demand.”
The growing importance of online plus offline
JD.com said it had shared its technology with offline retailers, following its strategy of offering retail as a service. It said that more than 600,000 offline stores used its technology and infrastructure to attract customers to their own Singles Day promotions. JD introduced a new game that rewarded shoppers with points, based on the number of steps they take to visit bricks and mortar retailers. Those points could then be exchanged for products and prizes. More than 200,000 stores and 200 brands took part in the game. Its own portfolio of stores includes the 7Fresh supermarket chain, as well as a range of unmanned convenience stores and JD Retail Experience Shops.
“After more than a decade of building out technology and infrastructure for our own retail business, we will spend the next decade extending our capabilities to enable and empower both online and offline retail innovators,” said Dr. Jianwen Liao, chief strategy officer at JD.com. “We see the future of retail as one without boundaries, and we are working to bring consumers true boundaryless retail, where they can buy whatever they want, whenever and wherever they want it.”
Daniel Zhang, chief executive of Alibaba Group, said more bricks-and-mortar merchants than ever had taken part in Singles Day, via upgraded and digitised “smart stores”. They included mom-and-pop stores alongside businesses RTMart and easyhome in which Alibaba has recently invested. Alibaba also offered RMB1bn in”red packets” of coupons to be spent in-store, while members of its 88 VIP loyalty programme benefited from an extra 5% discount over the course of the event. “Around 200,000 smart stores joined November 11,” he said. “As we always say, we truly believe the first thing for brick-and-mortar stores who want to go New Retail to do is to go digital. For all those retail partners, why they actively participated was not because it was a shopping day, but because it was a day to give people a unique experience.”
One figure to take away…
As big as Singles Day already is, it’s worth noting a figure flagged up by Alibaba: only 17.5% of Chinese retail sales curently take place online. That’s a similar proportion to the UK, where online accounted for 17.8% of UK retail sales in September 2018, according to the ONS, and suggests there’s plenty of room for expansion in the future.
Image courtesy of JD.com