There's no stopping the rise of China’s middle class
Launched in 2009, this year marked the 10-year anniversary for Singles’ Day shopping festival created by Alibaba. The event that eclipses Black Friday, Cyber Monday and Amazon’s Prime Day entirely in China. This year made history with $30.9 bn in sales over 24 hours.
The success Alibaba's Singles' Day shows no sign of slowing down.
To understand the sheer value of the event, here are some numbers to consider:
- $1bn in sales in 85 seconds.
- 15 hours, 49 minutes to cross 2017's $25.3bn sales figure.
- $30.8bn in sales in total across 230 countries and regions.
- $6.5bn in sales in 20 minutes, $10bn in 60 minutes.
- 90% of sales from a smartphone.
- Since 2009, Singles' Day has grown by 4000x for Alibaba .
- 1bn+ total orders.
Let's take a closer look at what these numbers might mean:
1. A slowing economy, but growing consumption
Against the backdrop of a trade war with the US and slowing economic growth, the spending power of Chinese consumers is at its highest. Even facing geopolitical and cyclical economic challenges, numbers indicate that there is no stopping the rise of China’s middle class and its quest to upgrade through the consumption of higher-quality products and services. Alibaba’s executive vice chairman Joe Tsai firmly claims: “I think you have to understand Alibaba and what Alibaba’s doing in the context of the long-term secular trend that’s developing in China, which is the rise of the Chinese middle class. That trend is not going to stop, trade war or no trade war.”
Singles Day - or Double 11as it is also known - started in 2009 and has grown from obscurity and $7mn in sales to $30.8bn this year, which is not only an extraordinary story of the growth of the ecommerce behemoth created by Jack Ma in 1999 - but also a symbol of China’s rising consuming power.
2. Singles’ day is headed outbound
Alibaba has also been aggressively expanding into emerging markets in both South East and South Asia in order to add more consumers into its ecosystem. The acquisition of Lazada is also big milestone for its expansion efforts in this region. This year was the first-time the region participated in Double 11 , with Alibaba building infrastructure with payment and logistics prior same year.
For Lazada – the Singapore based SEA’s biggest web retailer - Double 11 saw a growth of 600% in GMV compared to last year. In an attempt to fuel the growth, South East Asia will play a key role in proving Alibaba’s ability to go international.
3. ‘New Retail’ is already happening in China
In 2016, Alibaba announced its strategy of 'New Retail' — blurring the lines between online shopping and the in-store experience. But it was 2018 when the 'New Retail’ truly kicked in, with more than 100 Hema stores - an online grocery store, a mix of Amazon Go and Whole Foods - participating in the holiday, offering loyalty points, virtual red packets of money and other deals. 'New Retail' is also a quantum leap in merging offline and online experience for gaining data to draw a bigger picture of the user’s purchase journey.
Alibaba has been strategically deploying technological tools, investing, and making acquisitions that are critical for expanding its new retail capacities. Last month it announced a new restructuring in the company focusing on ‘New Retail’ and cloud computing to great effect as it aims to consolidate on China’s consumer economy.
Agila Tanirbergenova, digital strategist, Qumin
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