Can you just try to guess how much did alibaba made in one day ?
In the latest Single’s Day Sale event by Alibaba, arranged on 11/11 every year, which has also became a global shopping festival has clocked a whopping sales of $30billion in GVM( Gross Merchandise Value – that’s more than US Black Friday and Cyber Monday online sales combined.
The company had sold products worth $1 billion within the first 85 seconds of this 24 hour event and had hit the $10 billion mark in just 1 hour and 48 seconds (5 minutes 21 seconds more than of last year).
Also it crossed its previous year’s 812 million order mark and $25.3 billion GMV record by 5:34 p.m. SIN/HK.
Around 180,000 brands had participated in this sale (approximately 40,000 more than last year) including Huggies, Dyson, Apple, Samsung, Xiaomi, Sony, and Phiilips.
Categories which created most of the sale were mobile phones, women’s fashion, diapers, computer accessories, and audio equipment.
The factors contributing to this overwhelming sales figure were
• Alibaba’s acquisition of Lazada that organised its first 11/11 Sales festival in 6 Southeast Asian countries
• Ele.me which provides delivery for some Starbucks stores across eleven Chinese cities
• Offering of huge discounts on its e-commerce website Tmall and much more.
How Alibaba turned a fake holiday into a $30 billion Shopping Festival ?
(Singles Day) this phrase literally co-relates to Chinese expression “bare branches” which refers to bachelors who aren’t adding “branches” to the family tree.
Now all of this started due to China’s One child policy which was implemented from 1978 to 1980, with an intention to curb its overpopulation problem.
But this policy came to end later which has adverse effect. China is now facing massive gender imbalance due to one child policy. It’s projected that, by 2020, men will outnumber females by at least 30 million.
From this national turmoil, the unofficial holiday was born. It’s a day that was initially for single men to party with other single friends.
Spikes in shopping sales were common in China during late September before national holiday and again two months before during Spring Festival.
This two shopping events created drought during rest of the year and Alibaba hoped to exploit this with deep cuts in prices.
And that really worked. Seeing the potential of Alibaba’s move, most Chinese retailers jumped on the event next year.
Now, Singles’ Day has become the biggest shopping day in the world.
And it seems like it’s just going to get even bigger.
Learning for Indian Market
Being one of the fastest growing e-commerce markets in the world, India needs to learn from these figures on multiple levels. For these figures tell a story bigger than India’s overall annual GMV in the e-tail sector.
So starting with the direct comparison, let’s look at the market leaders like Flipkart, Amazon, and most importantly Paytm Mall.
Walmart backed Flipkart, in its latest BBD claimed $1-1.1 billion in GMV in 5 days.
While Amazon, in 6 days of Great Indian Festival, could manage an $800 million sales figure.
Paytm Mall, Paytm’s e-commerce arm in which Alibaba itself is the largest investor, sold merely 12 million orders during its Maha Cashback Sale.
Flipkart and Myntra’s combined current annual GMV stands at $7.5 billion, while Amazon India’s relative figure has touched $5 billion. Paytm Mall claims an annual GMV run rate of $3 billion in February this year, targeting $10 billion by the March in next year.
This reflects how the largest e-tailers of India have a huge ground to cover in future individually.
India’s overall annual online retail sales figures and estimations actually puts in perspective the struggle still Indian e-commerce startups have yet to go through before actualizing the potential the market claims to possess.
As per Alibaba’s top executives themselves, fragmentation is the main challenge in Indian Market.
Still the country has only realised one-tenth of its potential in the e-commerce market for now and it is way behind China’s trillion dollar e-commerce industry.
According to Alibaba, the crux of this matter lies in the fact that the country has different states with different regulations and a not-very-unified market that cannot thrive on traditional models like B2C or C2C. This further evaluates the companies favour of Paytm Mall, as their strategy is to capture the Indian market via online payments.
The entire Indian internet and startup economy is looking upon the next 500 million users as their target market in order to beat the competition and attain dominance.
For e-commerce players, the challenge is tackling the fragmentation, also the problems in logistics, payments, and building a regular customer base.
But most importantly, the up-coming internet generation belongs to tier II to tier IV cities, and that being a tricky market to crack which requires innovation and investment.
It’s not be possible for Indian e-com players to copy Alibaba’s growth mechanisms, but there’s still a lot to learn in terms of innovation, strategising, and expansion to achieve overwhelming growth and stability.