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Alibaba reports $9.3 billion in Singles’ Day sales and touts global expansion
    November 19,2014



 

China’s e-commerce giant says consumers purchased $9.3 billion worth of goods—including 50,000 new cars—on Alibaba marketplaces during the annual Nov. 11 event. For the first time, Alibaba took the promotion global, and chairman Jack Ma says that’s just the beginning of Alibaba’s international expansion.

 

Alibaba Group Holding Ltd. says consumers purchased $9.3 billion worth of goods during the annual 24-hour sales event that takes places each year on Nov. 11 in China. For the first time, Alibaba extended the promotion beyond China and says consumers in 217 countries purchased on Alibaba e-commerce sites during the sale.

 

Alibaba, which raised $25 billion in a record-breaking IPO on the New York Stock Exchange in September, will continue to expand beyond China, executive chairman and founder Jack Ma told reporters today in a presentation at the company’s headquarters in Hangzhou, China, reported by Alibaba’s official Alizila blog.

 

“Right now our plan is to prepare comprehensively for our globalization in the next three to five years,” Ma said.  “We hope that one day all small businesses and consumers around the world are able to trade online. We are working on developing both of these directions.”

 

Alibaba extended the annual sales event—which has generally been called Singles’ Day, though Alibaba now calls it the Alibaba Group 11.11 Shopping Festival—to its cross-border e-commerce platforms. That includes AliExpress, a shopping portal that enables consumers outside of China to buy from Chinese companies, and Tmall Global, which enables overseas brands to sell online to Chinese consumers via Alibaba’s Tmall marketplace. Alibaba also operates the larger Taobao marketplace on which any Chinese resident can sell. The two marketplaces combined account for about 80% of online retail sales in China.

 

The Chinese company has not disclosed the dollar volume of sales on AliExpress during the one-day event, which began on AliExpress at midnight Tuesday Pacific time. However, Alibaba did report that consumers from 217 countries purchased on Alibaba sites during the sale, with the largest numbers of buyers coming from Hong Kong, China, Russia, the United States, Taiwan, China and Australia.

 

The event highlighted the growing consumer demand in China, Ma told journalists today. China has been talking about growing domestic demand for many years and today we see that real consumption demand is taking place in China,” he said. “We feel the Chinese economy doesn’t lack external demand but internal demand is much needed and we are fortunate enough to be able to tap this demand.”

 

Alibaba says consumers purchased on its marketplaces during the sales event 1.2 million large home appliances, 3 million lighting products, 200,000 bottles of laundry detergent and 50,000 new cars, Alizila reported. The company previously had predicted that 500 million parcels will be delivered in China this week as a result of the online sale.


 

The $9.3 billion worth of goods purchased on Alibaba sites during the promotion represented a 60.3% increase over the $5.8 billion in sales on Nov. 11, 2013. Mobile devices accounted for 42.6% of the purchases.

 

To put the Alibaba sale into perspective, the $9.3 billion in sales on Alibaba sites is more than triple the total sales of U.S. e-retailers on Black Friday and Cyber Monday last year.

 

Unlike Amazon.com Inc. and major retail chains like Wal-Mart Stores Inc., Alibaba does not own any merchandise, instead providing shopping platforms on which more than 8 million companies sell to online shoppers. In that respect, it operates like eBay Inc.

 

Alibaba also has created a payment service, Alipay, to facilitate online purchases in a way that gives shoppers confidence—the money they pay is held in escrow until the shopper is satisfied. In addition, Alibaba has said it will invest over $16 billion in a joint venture with Chinese delivery services to facilitate nationwide fulfillment of online orders in China, a country that lacks a single national carrier such as UPS or FedEx. Alibaba’s Ma heads up the company called Cainaio Network Technology that manages the venture.

 

Alibaba Group executive vice chairman Joseph Tsai said it’s the Alibaba business model of working with other companies to enable e-commerce that made possible the massive sales this week.

 

“If we are simply sourcing our own inventory, keeping all of that in our own warehouses and selling everything directly to consumers we would not be able to handle this kind of volume,” Tsai told reporters yesterday. “What we are doing is gathering the parties in our ecosystem… all those guys in the ecosystem who are working together for 11.11 today. So it’s not just Alibaba doing this, it’s the ecosystem.”

 

The term Singles’ Day derives from the four “1’s” in the date 11/11. Unmarried Chinese students in the early 1990s decided it was an appropriate date to celebrate their single status, and Alibaba turned it into an online sales event in 2009. Other Chinese retailers have since offered their own sales on Nov. 11, and this year such U.S. e-retailers as Overstock.com, No. 31 in the Internet Retailer Top 500 Guide, and online affiliate site Dealmoon.com also promoted Singles’ Day sales.

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