How Alibaba Raked in $5.7 Billion in 24 hours
Alibaba, the Chinese e-commerce giant, just worked some major magic: Its payment service, Alipay, logged $5.7 billion in sales in a single day on China's annual Nov. 11 online shopping bonanza.
That's a record-breaking figure -- up 83% from last year. And it's almost three times the sales of 2012's Cyber Monday.
So how did the event known as 11/11 get so huge, so fast?
With the event in its fifth year, more brands and merchants flocked to Alibaba's online sales platforms, Tmall (an online shopping mall) and Taobao (similar to eBay). About 20,000 merchants took part, double last year's figure, including international brands like Nike and the Gap.
Alibaba launched TV commercials, outdoor ads and social media promotions before this 11/11, though not more than in the past. But since individual brands also publicized the event, the big increase in participants meant more buzz.
Many brands encouraged shoppers to put items in their shopping baskets early to allow for quick checkout Monday at midnight, which also juiced the anticipation.
"Every year on 11/11 we have a lot of users who never shopped online before -- they hear about the event, and because prices are lower and there's a massive selection of products, they give it a go," Alibaba spokeswoman Florence Shih said.
Over 24 hours there were 402 million unique visitors to the platforms – "or about two-thirds the entire online population in China," as Ms. Shih put it. Out of China's total population of 1.3 billion, 591 million have internet access, the China Internet Network Information Center says.
Transactions on mobile devices increased more than 5 times this 11/11 to $877 million. In some regions, Alibaba offered free data to customers so they wouldn't exceed their mobile limit while shopping. Strikingly, mobile sales were 21% of the number of transactions.
Alibaba, which is preparing to go public, has "put lot of effort into building mobile platforms" and ensuring they are easy to use, said Ying Mu, corporate-branding manager for China-based consultancy Labbrand. "If you look at people in the second-, third- or fourth-tier cities, maybe they don't have internet in their homes, so their internet portal is their mobile phone," she said.
Clothing and accessories are traditionally the biggest sellers online in China. But this year two breakout stars were upstart local mobile phone maker Xiaomi and Chinese appliance company Haier, Ms. Mu said.
Hugo Barra, a former Google Android executive who recently caused a stir by decamping to Xiaomi, tweeted that the company sold 380,000 devices totalling $82 million in a few hours.
China's biggest e-commerce event started out in 2009 with just 27 brands. It was originally called Singles Day, as it coincided with an anti-Valentine's Day celebration created by university students.
Other e-commerce platforms have joined in, including Jingdong and Yihaodian, which is majority-owned by Walmart. No total sales figure for all retailers was available, but Alibaba's platforms account for the biggest share.