When we talk about a successful online store, necessarily the name of Alibaba has to come up at some point and in fact today it should appear in the first places. On Singles' Day, the Chinese e-commerce giant has broken all previous sales records in transactions of goods worth $ 14.3 billion. This figure is particularly surprising, especially when one considers the slowdown in the Chinese economy known to have affected domestic consumption. Alibaba's momentum for the November 11 event grew to become a global event and it was strongly consolidated thanks to the signing of agreements with more than 20.000 foreign retailers to be able to sell their products on platforms such as Taobao and Tmall.
China's slowdown could still affect
Despite this Alibaba sales recordAccording to finance specialists, 60% YoY in Singles' Day sales are not a boom for the retail market in China. In fact, the biggest long-term concern for the e-commerce sector continues to be the slowdown in the economy. According to the South China Morning Post, Alibaba shares have fallen more than 7% since the aforementioned event, while JD.com shares also posted a 5% decline in just three days from last Friday. . It is also thought that although the figures obtained in the Day of the Singles were strong, specialists consider that consumers could have taken out the bills of the previous months to spend on this day. Furthermore, about 60% of the 26 warehouses listed on the China Stock Exchange recorded a decline in their earnings for this third quarter.
Alibaba's figures on Single's Day could be lower
Although department stores were affected by strong competition from other e-commerce stores, weakening macro conditions and rather slow consumer spending were also indicated as one of the main reasons. In fact, Deutsche Bank analysts have mentioned in a report that the deterioration in macroeconomic conditions is still a great concern for Alibaba investors, mainly long-term investments. Not only that, it is believed that the scandal of the sale of fake products could also lead to a slowdown in growth and consumer activity.
Economic analysts have also sown doubts regarding the Alibaba sales figures on Singles' Day. That is, the figure of the 14.3 million dollars that the company invoiced on this day, does not take into account the high reimbursement rate since some sellers could also have made orders last November 11 with the aim of inflating the figures of sales. Even the Hangzhou-based company does not disclose what the rate of return was at the event, however the data that has been obtained through China Industry Research Network, shows that online shoppers refunded 40% of the average orders that were placed on Singles Day but 2013.
How did Chinese consumers prepare for Singles' Day?
Created by a group of Chinese youth during the 90s, the celebration known as Single's Day, was originally a way to celebrate the life of the single. This annual event takes place every November 11 and is popularly described as China's anti-Valentine's Day. As this celebration grew in popularity at the national level, Alibaba became the first large company to obtain real economic benefits in 2009 thanks to the launch of a special online sale, transforming this day into the largest 24-hour online shopping event ever. in turn exposing the growing wealth of the middle class in China.
For this year the expectations of the also known as double 11, were quite high and a better performance was expected compared to last year. In fact, a survey conducted by the Nielsen specialists revealed that 56% of Internet users in China said they expected to increase spending this year compared to Singles' Day 2014. Consumers planned to spend $ 277 more this year, which is 22% over to last year's event. The prediction then was that Alibaba could exceed 10 billion dollars in a 24-hour period for the first time in its history, something that eventually ended up happening.
Last year in the Day of the Singles, Alibaba posted a sales record of $ 9.3 billion, which was more than four times the $ 2.4 billion sold at the time. cyber monday, which is the largest online sales day in the United States and is celebrated every first Monday after Thanksgiving. To the Nielsen experts, it was actually not much of a surprise to find that the Chinese consumers plan to spend more at this year's event. The reason for this is that income levels, as well as Internet penetration, continue to increase throughout China, so this can be taken as a natural process.
To this new edition of Singles DayIt was expected the participation of more than 1.000 brands of retail companies, that is, around 180.000 stores in 330 cities on the continent. But it was not only companies from China, 5.000 foreign retailers from 25 different countries such as the United States, Japan and South Korea, they also participated in the event. Another interesting fact that the Nielsen survey revealed regarding the way they were prepared consumers for Singles Day, indicated that three out of five respondents said they would buy or plan to buy products abroad this year.
For Nielsen, as Chinese consumers become increasingly sophisticated, their desire to obtain high quality products, it is also increasing. In line with this trend, it is beginning to be seen that more and more consumers are turning to cross-border purchases abroad. Not only that, advance booking promotions, as well as pre-orders are becoming an increasingly effective means for companies. e-commerce online stores as a way to attract more traffic to your sites.
An event that must improve every year
Compliant the event grows every year, shipping and delivery times continue to be slower and become a very serious problem for consumers. In fact, in the Nielsen survey, 62% of those surveyed mentioned this problem, which is why logistics companies announced for this new edition that will use all the tools at their disposal to maximize efficiency in all respects. In fact, it was considered that for this year, data and pre-orders were being used to prepare the products in advance.
The most important aspect in this matter is that Cainiao, who is a Alibaba subsidiary company, would have revealed a special regime for this year's event that would aim to deliver the products in less than two hours for certain customers.
Not everything is honey on flakes
While this sales record is impressive, Alibaba still has to deal with the huge problem posed by product counterfeiting. In fact, since 2013, the Chinese retailer has spent 161 million dollars with the intention of eradicating this problem, once named by the founder of the company, Jack Ma, as “a cancer that needs to be treated”. The company has been fighting for years because of counterfeit products; Already last May, a lawsuit was filed by the Kering company, owner of such important luxury brands as Yves Saint Laurent and Gucci, for monetary damages, in addition to which there was also a injunction against Alibaba for the alleged sale of fake products in your online store. Not only that, shortly thereafter, the American Clothing and Footwear Association reportedly wrote an open letter to Jack Ma pleading that he take stronger action on this issue.
Investigations carried out by specialized media have revealed that there are many sellers claiming to sell used products from Chanel, Rolex, Burberry and Rolex, however it is not clear if Alibaba is verifying the legitimacy of all these products. Not only that, many third-party sellers have also been known to use fancy brand names to sell related products.
But big investments from Alibaba They seem to be starting to pay off as the company is currently using algorithms, in addition to random checks on vendors, with the intention of identifying vendors who might be using advertising for counterfeit products.