Channel News Asia reports Alibaba Singles' Day Tops US$30 Billion but Growth Rate Plunges.
Chinese e-commerce giant Alibaba Group Holding Ltd cashed a record 213.5 billion yuan (US$30.70 billion) in sales on Sunday during its 24-hour online retail frenzy Singles' Day, but the event's annual growth dropped to its slowest-ever rate.
Shoppers in China and across the world snapped up hot items including iPhones, furniture and milk powder starting pre-dawn, with Alibaba recording roughly US$10 billion in sales in the first hour after midnight.
Singles' Day, also called "Double 11" is the world's biggest online sales event, outstripping the sales of U.S. shopping holidays Black Friday and Cyber Monday combined.
Single's Day Celebration
Party May Not Last
The New York Times reports Alibaba Had Another Big Singles Day. The Party May Not Last.
>At the stroke of midnight on Monday, Alibaba said it had racked up $30.8 billion in sales the day before, as measured by its own homegrown metric, gross merchandise value. That handily topped last year’s big number, $25.3 billion.
But all around China, gloom and uncertainty are the word.
Economic growth is slowing, and the country’s hundreds of millions of middle-class shoppers seem to be holding on more tightly to their pocketbooks. Tech companies are antsy about the government’s more interventionist attitude toward big business. The tariff fight with the United States is casting a pall not simply over trade, but over China’s future writ large. This month, Alibaba cut its sales forecast for the year ending in March by around 5 percent, citing the wobbly economy and the trade war.
Alibaba is not like Amazon in that it is not a retailer. It merely provides the digital shelves and aisles for other merchants to sell their goods. But in its relentless ambition, Alibaba may be Amazon’s only global equal. Both companies want to fulfill their customers’ every desire and need.
No one expects Alibaba to generate whopper Singles Day sales growth numbers every year for eternity. At some point, when growth starts decelerating quickly, the event could change, to focus on one week’s sales instead of one day’s, or on something else entirely.
Big Ticket Items
A big chunk of the past growth of Alibaba comes from furniture and appliance purchases for new homes.
But home purchases will will likely crash.
50 Million Empty Homes In China
Please note there are 50 Million Empty Homes In China but Third-Home Purchases Soar.
An amazing 69% of recent purchases are second or third homes.
A housing bust is coming and it will hit China hard, including Alibaba.
Inquiring minds may want to see a musical tribute to this shopping event. I can oblige.
A Chinese girl group Rocket Girl 101performed a song called “Wanna Buy Wanna Buy” as backup dancers pushed shopping carts bearing the logo of Aldi, the German discount grocer.
Rocket Girl 101
Image from The Star.
Shop till you drop or until you are insolvent. Whichever comes first.
Mike "Mish" Shedlock