Reference News Network reported on November 8 that with the help of pop singer Katie Perry holding an opening concert and retired basketball player Kobe Bryant appeared, Alibaba's annual consumption carnival - China's Singles' Day sales event - this week with unprecedented pomp and funding.
Alibaba plans to export "Singles' Day". (Financial Times website)
The 24-hour sale, which took place on Nov. 11, was not an invention of Alibaba, but the e-commerce group has made the date a regular holiday in the retail calendar, according to the Financial Times website on November 8. Now, the company intends to take advantage of the hustle and bustle surrounding the event to expand it beyond China.
As a China-only event, Singles' Day has far surpassed Black Friday in the United States. Alibaba's turnover reached $14.3 billion (91.2 billion yuan) on November 11 last year. By comparison, over the entire five days from Thanksgiving to Super Monday (covering Black Friday, when retailers in the U.S. launched Christmas holiday sales at steep discounts), online shopping costs in the U.S. amounted to $11.1 billion (about 75 billion yuan).
In 2015, Tmall's "Double 11" transaction volume increased by nearly 60% year-on-year, close to the 63% year-on-year increase in 2014.
The company is mining big data collected through its retail, streaming and payment platforms. This year, it will launch its first pilot program for Singles' Day shoppers in Hong Kong and Taiwan. Next year, the company also intends to target shoppers in Southeast Asia.
In addition, the company has grown through mergers and acquisitions, such as its stake in Lazada, a Southeast Asian e-commerce group.
Still, analysts say internationalization is a daunting task for Alibaba — as is its domestic counterparts Baidu and Tencent. The three Chinese technology companies, collectively known as BAT, are growing rapidly at home because they are not bound by international competition, but can only take small steps abroad. Analysts also say the reverse holds: Amazon has failed to open up in China.
Scott Likens, head of PwC's Analytics and Emerging Technologies business in Hong Kong, said: "Alibaba faces enormous challenges in going global. Models that work in China are not necessarily effective abroad, or at least not equally effective. ”
Jack Ma, the founder of Alibaba, who once worked as an English teacher, set a target of 2 billion consumers for the next 10 years. In other words, by 2026, he expects about a quarter of the world's population to shop through Alibaba's e-commerce platforms, including Taobao and Tmall.
Jack Ma, chairman of Alibaba's board of directors, recently visited the "Double 11" preparation site, saying that there are no requirements for sales data, "the picture is a happy and happy."
These global ambitions are often overconfident. Mr. Ma called his "World Electronic Trade Platform" program, like a dispute-free World Trade Organization (WTO), to help "80 percent of companies and developing countries that don't have the opportunity to participate in world trade" sell goods overseas.
His rhetoric to subvert the concept of e-commerce is equally bold. Alibaba says it's becoming a "consumer-to-business" company, rewriting retail rules to let shoppers tell retailers what they want to buy through big data.
"We're going to be the future of the new retail industry," Alibaba CEO Daniel Zhang said, "and product design and manufacturing will evolve in a direction that's truly driven by big data." ”
Essentially, this means that Alibaba is using past buying and browsing habits to predict products of interest to consumers and manage web pages.
Alibaba's extensive involvement in a wide range of businesses has given it access to customer data that far surpasses that of international competitors such as Amazon. Chinese consumers may (and do) spend a lot of time on Alibaba's website. Its 450 million monthly mobile users spend an average of 20 minutes a day on Taobao's personalized app, streaming service Youku Tudou has 580 million users, and Alibaba also holds a stake in payments platform Ant Financial.
"As a digital company, they collect user behavior," said Steven Lu, Head of Technology at Bain & Co in Shanghai, "and they've started monetizing it through their core business." ”
Providing merchants with more data means that Alibaba can charge higher commissions, which are generally between 0.4% and 5% for Tmall.
According to PwC's Li Jingsi, the general e-commerce model is based on a physical item with a label on the shelf: the customer chooses from the goods offered by the merchant and then pays the fixed price.
"However, in the new world of BAT, this does not need to be the case," he said, "with the infrastructure, with the data, with the tools to analyze." It's just a matter of putting these together. So pricing can be dynamic, as we've seen in other industries like airlines and hotels. ”
Steven Lu added that the data also helps with logistics and inventory planning. For example, shoppers can add their selected items to a virtual cart before Singles' Day to ensure that items can be delivered.
By analyzing the number of times shoppers refresh and fill their carts, Alibaba was able to measure their odds of buying. This data can help merchants estimate how much inventory they need and where that inventory should be deployed.
Steven Lu says this, in turn, can help improve logistics efficiency and, for merchants, shorten the time spent on funds.
As consumers rush to buy low-priced goods, merchants and industry players will comb through the data to see if Alibaba can achieve rapid growth for the seventh consecutive year.
"They break records every year, how long can this go on?" Li Jingsi asked. However, "the situation so far is very good, so I will not bear them".
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