China's 25 billion-dollar shopping mall – TechCrunch



This Sunday is November 11, a favorable term in the Chinese Technology Community, as it marks Day of the Free Day, the largest online shopping day in the world. This year is particularly tangible because it will be the tenth year of the annual tournament, also known as Double Eleven, because it was created by Alibaba, a Chinese e-commerce giant.

One day is a huge deal today. Alibaba sold more than $ 25 billion last year last year because 11.11 moved outside of China to other areas in Asia and beyond. The company has grown steadily year on year, so it is likely that we expect $ 35 billion or more in trading Sunday, though there are doubts about China's economy and the ongoing US trade war.

We have dug into this phenomenon, so this year you are well prepared for what to expect.

What is it?

The action is similar to Black Friday and Cyber ​​Monday in the US but is 2.5 times larger than both of these dates together. Alibaba is selling a range of products within its on-line sales platform, including Taobao, Tmall for brands, AliExpress international services, and its global businesses. These include Lazada in Southeast Asia and India Paytm, which counts Alibaba and Ant Financial as the major investors.

Sales include obvious goods such as smartphones, TVs and other large consumer goods, but also fashion, clothing, furniture, health products and more. Less-expected items that are well sold include detergents, toilet paper and perishable daily items. There is also a strong demand for cars among others.

Overall, Alibaba recorded 1.48 billion transactions worldwide this year, with a maximum of 325,000 orders per second. Her Alipay payment service is quiet 1.5 billion payment transactions with total orders 812 million. While the dominant 90 percent of sales came from mobile devices – this is significantly ahead of the US, which recorded 37 percent during Black Friday and 33 percent in cyber Monday.

Alibaby's sale in 11/11 reached a record $ 25 billion in 2017 (Image via Alibaba)

Alibaba also promotes an offline retail store that is in line with its own business that has grown into physical trades through its own Hema brand and a partnership with major Chinese retailers such as Sungate tech giant and Sun Art hypermarket operator.

It was renamed the "11.11 Global Shopping Festival" in 2015 to reflect Alibaba's efforts to grow sales outside its main market in China. Last year, he said he attracted more than 60,000 international brands with customers located in more than 225 countries.

In the beginning

November 11 was not always synonymous with the purchase of online discounted products. First, the most important data in China came in the nineties when it was said to have been promoted as a celebratory day, as the date represents four "binary stars". Later, it gained new meaning as a day of celebrating relationships – a huge popular date for marriages – and finding potential partners.

The e-commerce component came in 2009 when Managing Director Daniel Zhang took advantage of the Tmall, Alibaba, 27 traders are participating. Zhang, who is then commissioned to trade with Tmall, is now Alibaby's managing director and becomes the chairman of the firm when his face, Jack Ma-Alibaba for many years, eventually stops doing business next year.

In 2009, Alibaba earned roughly $ 7 million in its inaugural single day. In an interview with CNN this week, Zhang said he "never expected" that promotion would become such a huge phenomenon for both Alibaba and wider e-commerce.

Alibaba's CEO, Daniel Zhang, kicked off the 2009 One Day Shopping Day in Tmall (Image via Vivek Prakash / Bloomberg via Getty Images)

For Alibaba

As a day of individuals, it has grown into a nationwide celebration, and other e-commerce players, such as JD.com and Pinduoduo, have also joined to make a month of robust consumer spending. For example, JD.com recorded 11.1 percent of active mobile app users by 11.1 percent in November, according to QuestMobile.

The warm reception of the event has also inspired competitive festivals throughout the year. In 2010, JD.com, which ranked as Alibaba for the volume of transactions, ran its One Day festival within twelve days and launched its own buyout event in mid-June, which will be June 18th. Suning, a prominent Chinese appliance retailer, changed its August 18 to a sales event.

None of the late arrivals were able to cope with Singles' Day, but Alibaba continues to expand the boundaries of the world's largest buying event.

11.11 New York Advertising (Alibaba Image)

Not just numbers

Individuals' day increases each year, but sales slow down. Year-on-year growth in gross commodity fell from less than 65 percent in 2014 to around 40 percent in 2017.

But Jack Ma always wanted to diminish the importance of these figures. In 2013, the Chinese media reported on the 11th of November that it did not show up after the sale. He repeated a similar message in the years to come.

Ma seemed to be looking for "stable" growth. This is because shopping spree requires extensive infrastructure to power features such as logistics and payments.

Ma's words are in line with the company's continued efforts for potential partners to help their retail ecosystem. Last year, Alibaba poured $ 717 million into Huitongda, which operates an infrastructure for online retailers to sell to rural customers – who also participate in the Single Day.

Ali Financial's Financial Branch, financial firm AliBaba, has funded a number of payment solutions companies around the world to support the global e-commerce reach of the company, while the cloud computing division of the company will meet the requirements of $ 25 billion in annual sales. Then is the Cainiao Network logistics platform, which helps to process 812 million orders placed in China last year.

One day he also saw that Alibaba adopted technology on a broad scale. Last year she dared to AR – Maybelline allowed customers to try lipstick practically – Nike is among the brands that used gamifies to attract customers and Alibaba Tmall's own service has adopted a "virtual fitting" that helps sell clothes.

Offline sales

Alibaba President Ma also predicted what will become the norm for the Day of Celebration today. "We want all e-commerce companies involved and all bricks and mortars should be part of it," he said.

In 2016, Ma proposed the term "new retail" to describe the future of seamless integration of online and offline retailing. Last Sunday was the dawn of the push shopping festival. This year, 200,000 bricks and coin stores were registered at Singles Day to offer discounts to Alibaba's customers. For example, a user can make an offline deal when he uses the Alibaby Alipay e-wallet to pay at the mall. Alibaba also uses Alipay to split money prizes through red wallet competitions.

Alibaba last year said that the new retail "has made a promise" during 11.11 but refused to provide data. This year, due to Alibaba's physical retail progress – now running over 30 stores and including face-recognition payment – the offline component will be more important than ever. Beyond Hema and InTime physical shopping, which also includes Ele.me – and Starbucks – and the rest of the local service delivery platform.

Alibaba's 11.11 deals will now include Starbucks coffee, which can be ordered exclusively through the Ele.me delivery service thanks to a partnership with an American coffee machine (Image via Alibaba)

Expectations for 2018

The forecast for this one-day day of 2018 is demanding, as it appears against the backdrop of China's economic struggles and the US-Sino-US trade war, which has seen billions in commodity prices. Most of Alibaba's sales, however, remain in China, both at 11.11 and throughout the year, so despite progress in international growth, it is unlikely that US government actions would be felt.

However, some key factors:

  • Growth slowdown: Alibaba quarterly sales continue to grow healthy (40 percent plus), but the rate itself slows down, this also applies to 11.11
  • Offline Alibaba makes agreed offline retail pressure to offset e-commerce saturation with multiple business transactions for those who shop personally
  • Services: Its on-demand services and delivery platform – allegedly worth $ 30 billion – will play a more prominent role in China by offering 11.11 trades
  • Payments: Alipay expands offers 11.11 and offers discounts to customers who pay via an online or offline application
  • More Global: Alibaba is the international trail ever growing, and in Southeast Asia pushes 11.11 harder, where he has established links with vendors in China, while now has committed businesses in Russia and Pakistan / South Asia to work with

Either way, Alibaba gives the world a real spectacle during 11.11.

First there is a star filled entertainment show, which takes place on the eve of the festival and then you can expect constant updates Alibaba Twitter Account during 24 hours alone. We will also watch the latest developments for you right here on Techcrunch.com, so stay tuned to the next one.

In this year's 11.11 tournament, Alibaba is the tenth and last one when Jack Ma leaves the company (Image via VCG / Getty Images)


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