Supply Chain Matters continues with our series of commentaries focused on the ongoing 2020 holiday fulfillment surge with highlights of this week’s China Singles Day shopping festival. Once again, this event is likely to establish a record for the globe’s largest online sales volume for an online promoted shopping occasion.

As noted in our many prior commentaries. this event started out as Singles Day in 1993, when students at a university began hosting singles parties meant to counter the negative social stigma associated with singlehood. Since this was a holiday designed to bring singles together, they chose the date with the most one’s to celebrate, that being 11-11. This holiday was then amplified by China’s dominant online provider Alibaba to provide greater meaning and visibility, not only across China, but increasingly to other countries.

China Singles Day Logistics

China online platform provider Alibaba now indicates that that it posted sales of 492.2 billion yuan ($75.1 billion) for this year’s 2020 event. That compares with the 268.4 billion yuan, equating upwards of $38.3 billion in Gross Merchandise Value (GMV) initially reported for last year’s event.  Alibaba’s omni-channel activities surrounding this one festival generates more revenue that the Thanksgiving thru Cyber Monday holiday shopping weekend event in the U.S. according to multiple sources.

This year’s Singles Day was different in that Chinese online consumers were allowed to initiate their online purchases during the first three days of November as well as November 11th, thus making this a four-day event. Reports indicate that in addition to allowing for more sales activity, the breaking-up interval of online shopping days was an attempt to assist the country’s logistics and parcel transport providers some added buffer in overall volumes of goods needing to be delivered. The reported sales indicates the success of this effort in more than doubling revenue generated. The event did feature a well-known super star concert in form of Katy Perry’s online streaming concert.

Unlike previous years, Alibaba has not as yet provided detailed information regarded the categories of items that drew the most interest or sales volumes. the online provider’s logistics business unit Cainaio as well as other country wide logistics entities are now under the looking glass with millions of packages now needing to make their last mile delivery journeys.

Both Bloomberg and The Wall Street Journal indicate in their reporting that the Singles Day headline numbers took a backseat to growing concerns that Chinese regulators are believed to be seeking to curtail the growing influence of Alibaba and other Chinese Internet retailers. News of Beijing’s unveiling of new antitrust regulations caused Alibaba’s stock to reportedly plunge 9.8 percent in yesterday’s trading.

A somewhat similar theme surrounds U.S. based Amazon in Europe with headlines that European Union regulator officials are accusing the U.S. online platform provider of breaking EU competition rules by exploiting the data the company collects from other sellers on its platform for its own benefit.

Bloomberg noted that the China online platform provider has benefited after the pandemic forced the country’s consumers up their purchasing of items online, especially for grocery items. Once more, a raft of new smartphone production introductions, including that of Apple, coincided with this year’s shopping festival. During the first two hours of online sales on November 1st, Nike and Apple reportedly were among 100 global brands that reported $15 million in transactions, while cosmetics maker Estee Lauder’s store on Tmall was the first to surpass one billion yuan in sales volume.

Alibaba has since invested an additional $3.6 billion in Sun Art Retail Group which operates upwards of 480 combination supermarket and department stores across China. With the combined investments, China’s dominant online retail platform will own upwards of 70 percent of this brick and mortar with plans to integrate online and in-store buying experiences.

It will be interesting if more detail does come forward in the coming days regarding how China’s online consumers elected to spend their hard-earned wages on personal gifts this year.

 

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