#SinglesDay — Alibaba shows JD.Com who's the daddy
- Investors and consumer were amazed at the size of Alibaba's Double 11 sales
- Shoppers can place deposits before November 11 to secure goods on the day
- This pre-booking means the spending spree is not just a 24 hour buying binge
- Alibaba sales dwarfed those of its biggest rival, JD.com
By Neil Flynn
Single’s Day 2015 lived up to the hype as Alibaba smashed its own 24-hour record, by selling over 90 billion yuan (some $14 billion) worth of goods in just one day.
Whichever way you look at this, it is huge, but there are certain circumstances that aided this. In addition, Alibaba’s rivals also performed well, but in reality, Single's Day was all about one firm.
snap up Single's day bargains. Photo: iStock
Alibaba smashes its record
The online e-commerce giant exceeded the expectations of many by recording a record 91.2bn yuan in sales. During the day, I had expected final sales to reach 80bn yuan, but this target was reached by 2100 Beijing time (1300 GMT).
In order to illustrate how large this was, it is a notable proportion of total GMV over the past few calendar quarters:
- Q1, 2014: 430bn yuan; Single’s Day 2015’s relative size: 21.2%
- Q2, 2014: 501bn yuan; Single’s Day 2015’s relative size: 18.2%
- Q3, 2014: 556bn yuan; Single’s Day 2015’s relative size: 16.4%
- Q4, 2014: 787bn yuan; Single’s Day 2015’s relative size: 11.6%
- Q1, 2015: 600bn yuan; Single’s Day 2015’s relative size: 15.2%
- Q2, 2015: 673bn yuan; Single’s Day 2015’s relative size: 13.6%
- Q3, 2015: 713bn yuan; Single’s Day 2015’s relative size: 12.8%
This puts the event into context, because it is essentially the same as just under two weeks' worth of shopping in one day.
The most impressive part of the event was that year-on-year growth remained reasonably steady, which bucked the trend of previous events.
Source: Alibaba Investor Relations. Create your own charts with SaxoTrader; click here to learn more.
Not just 24 hours
Alibaba's Single's Day sales of 91.2bn yuan will go down as the biggest ever one-day sales volume in history. However that's not technically true for two reasons.
A second point to note is something that I flagged in October. In order to bag the best discounts, Alibaba allowed users to pay a deposit on goods to lock in a particular price (see #SinglesDay — Alibaba intent on smashing $9.3bn record).
JD.com doesn’t provide GMV figures for its Single’s Day promotions, simply because they would be a small fraction of Alibaba’s, making the firm’s claim that it can rival Alibaba laughable, when in reality JD.com is a very strong and able rival to Jack Ma’s behemoth.
Nevertheless, JD announced record-breaking one-day results, where orders increased 130% and GMV increased in excess of 140% over last year. The event saw 74% of its orders placed via mobile, which was higher that Alibaba’s mobile GMV rate of 68.67%. This is a result of the growing relationship between Tencent and JD.com, and the growing amount of organic traffic flow from Tencent’s QQ and WeChat social media platforms to JD.com is very encouraging.
For what it’s worth, I actually prefer JD.com as a platform to use, and its direct link through Tencent’s WeChat app is very convenient. However, it will never be able to directly compete with Alibaba on Singles’ Day.
– Edited by Robert Ryan
Neil Flynn is is a China watcher based in Shanghai. Follow Neil or post your comment below to engage with Saxo Bank's social trading platform.