Market strategists have repeatedly warned about the potential fallout from the collapse of retail sales in China, a trend that has already led to a recession in global auto sales, while Chinese factory output has also declined. But the economic doldrums facing the world’s most populous country didn’t stop Chinese consumers from posting a massive tab on Alibaba’s Singles Day. In fact, according to CNBC, it was the largest haul in the 11-year history of Singles Day.
Across all of Alibaba’s sales platforms (a group that includes both Alibaba’s main website, the consumer-focused Tmall, and others), gross merchandise value (GMV) surpassed last year’s 213.5 billion yuan record (nearly $30.5 billion) on Monday afternoon local time, and kept rising through the rest of the day. At the close of the 24-hour Singles Day shopping event, sales surpassed last year’s 213.5 billion yuan to log more than 215 billion yuan (or $30.7 billion) of purchases, BBG reports.
Singles’ Day wasn’t focused solely on China. Some 500 million shoppers from China to Russia to Argentina logged on to their preferred e-commerce platform to buy up everything from iPhone 11s and Xiaomi handsets, as well as fresh produce.
To facilitate the sales, Alibaba offered huge discounts across its platforms. As has become tradition, the company enlisted the help of celebrities to boost sales. Its entertainment revue, which ran on Chinese TV to accompany the shopping online. The live event, which took place in Shanghai, included Taylor Swift and Asian pop icon GEM.
Singles Day has become an excuse to splurge among Chinese shoppers, kind of like how Americans storm both storefronts and e-commerce sites on the day after Thanksgiving, a day that has long been referred to as “Black Friday.”
But with the trade war still raging, this year’s Singles’ Day is expected to have even more resonance, as investors look for clues about demand for American-made goods. But instead of giving American brands the cold shoulder, the US was the second-largest seller in terms of GMV, with jewelry and clothing brands the most popular.
WPIC CEO Jacob Cooke, whose marketing firm helps foreign brands sell in China, said there was “no evidence” of reduced demand for American brands.
Alibaba founder and its former top executive Jack Ma has insisted that his company is well-positioned to ride out the trade war, and analysts appear to agree. Compared to other Chinese e-commerce firms, “Alibaba will probably be the one that will be able to circumvent and come out from the trade war in better shape” versus Baidu Inc. and Tencent Holdings Ltd., said Richard Wong, head of ICT for the Asia Pacific at Frost & Sullivan. “The current sentiment and confidence in terms of spending is still relatively high.”
Singles’ Day emerged more than a decade ago as a Chinese answer to Valentine’s Day. The date, 11/11, is numerically supposed o resemble “bare branches,” a Chinese expression for unmarried adults.
Although Singles Day has surpassed all equivalent US shopping sprees in terms of volume of merchandise sold, BBG noted that it’s unclear how much these record sales figures actually contribute to the bottom line since most items are heavily discounted. However, with Alibaba preparing to issue some $15 billion in a landmark share sale this month, a new Singles’ Day record could help boost demand for the company’s shares.