Online Shopping Carnival

By+Deng+Yaqing

When the huge screen at Alibaba Groups office building in Hangzhou， capital of east Chinas Zhejiang Province， recorded the total transaction value of the day hit 50 billion yuan （$8.17 billion） at 10：30 p.m. on November 11， Jack Ma， founder and Executive Chairman of U.S.-listed Alibaba， showed up in green leisure wear and expressed his willingness to turn November 11 into a worldwide shopping carnival within four years.

Since 2009， the day of November 11， selected as Chinas premier online bargain shopping day and named Singles Day because of all the number 1s in the dates permutation， has begun to catch peoples eyes with its many sales. According to statistics from Alibaba， its business-to-customer （B2C） website Tmall.com registered a transaction value of 57.1 billion yuan （$9.32 billion） on this years Singles Day， an increase of 21 billion yuan （$3.43 billion） from the previous year.

Over the past five years， besides Alibaba， a cluster of e-commerce companies like 360buy.com， the countrys second largest B2C website； Suning.com， the online platform of Chinas largest electrical appliance retailer； and Amazon.cn， China operation of Amazon， have also joined forces in Singles Day online promotions and witnessed an exponential growth of transaction volume. For example， this year it took a mere 15 hours for 360buy.com to double its sales volume on Singles Day of last year.

Data from iResearch， a leading market research firm focusing on Chinas Internet industry， showed that Chinas e-shopping market size had expanded from 250 billion yuan （$40.82 billion） in 2009 to 1.85 trillion yuan （$302.08 billion） in 2013， 7.4 times as much as that in 2009. By continuously gaining ground， online shopping accounted for more than 10 percent of the total retail sales of consumer goods in the second quarter of this year.

As online shopping gains increasing popularity among Chinese consumers， Singles Day has morphed into a national consumption day.

New trends

According to Alibaba， consumers from 217 countries and regions joined Chinese people in the snapping up on Singles Day. As Alibabas Chief Operating Officer Zhang Yong suggested， Singles Day has shown a tendency to become a worldwide consumption festival.

Cao Lei， Director of China e-Business Research Center confirmed the strong growth momentum of international online shopping and the possible globalization of Singles day. According to Cao， there have been more than 5，000 cross-border e-commerce platforms in China with a total cross-border transaction value of 3 trillion yuan （$489.86 billion） in the first half of this year. During this shopping carnival， there are even orders from countries like Seychelles and Barbados.

Placing orders with smart phones has become a general trend since the popularization of the devices in 2010， testifying that an economic force is taking shape in the mobile market.

During this years Singles Day， the mobile phone app of Alipay， a third-party online payment platform of Alibaba， saw a transaction value of 24.3 billion yuan （$3.97 billion）， up 454 percent year on year， accounting for more than 42.6 percent of the total. Occupying the shopping entrances of WeChat and QQ， two kinds of instant messaging software by Tencent， 60buy.com also saw its mobile transactions soar to a value eight times as much as last years， accounting for 40 percent of the total.

According to statistics from Analysys International， a leading business information provider in China， the value of transactions through mobile shopping in China totaled 210.32 billion yuan （$34.34 billion） in the third quarter of 2014， up 238.7 percent year on year. By now， the transactions have maintained a quarterly growth rate of more than 200 percent for seven consecutive quarters， surging 10 times within the past two years.

“The mobile era of Singles day is en route，” said Wang Yulei， President of Tmall. com， who admitted that the mushrooming purchases made via mobile devices is far beyond his expectation. “During last years Singles Day， its share was roughly 15 percent. Now， it has shot up to nearly 45 percent，” said Wang.

To avoid dog-eat-dog competitions， e-commerce companies chose to seek differentiated and complementary development. Tmall.com concentrated its promotion on Singles Day， while 360buy.com prolonged its sales campaign into a period of 12 days. Moreover， Sunning. com resorted to the online-to-offline promotion pattern by virtue of its large numbers of brickand-mortar stores.

Che Hongliang， Vice Manager of Sunnings E-commerce Business in Beijing suggested that if the prices in physical stores are the same with online stores， consumers are more willing to try and buy home appliances on the spot. “The online-and-offline integration provides consumers with more convenient and comprehensive services，” said Che.

In fact， traditional retailers are also trying to shift their attitude toward online shopping from resistance to embracement. While devoting themselves to the e-commerce campaign， some traditional retailers also think of creating their own offline shopping carnival. For instance， Intime Retail， a department store chain， once initiated a joint promotion with many other retailers in the trade in Qingdao， east Chinas Shandong Province this year.

Huge potential

“The online spending spree triggered by Singles Day has cast a new light on the promotion of domestic consumption，” said Premier Li Keqiang at an executive meeting of the State Council on October 29， noting that e-shopping can substantially drive the development of its upstream and downstream industries， such as express delivery and that progress should be made in intensifying information base and logistical facilitation.

On November19， when Premier Li visited Chinas leading e-commerce village， Qingyanliu village， in Yiwu， Zhejiang province， he said that although the e-commerce industry is based in the virtual world， it has the potential to serve the real economy as well.

Chinas economy has entered a “new normal”—bidding farewell to explosive growth and going through a slowdown—and the service industry and consumer demand are likely to become the next growth points.

The refreshing sales miracle created by Singles Day indicated the consumption capacity of Chinese people has huge potential to be tapped into， said Joseph Tsai， Vice Chairman of Alibaba Group， who believed the e-commerce penetration is now a mere 9 percent.

In the opinions on supporting the healthy development of domestic trade released on November 16， the General Office of the State Council has suggested to propel the development of online consumption by building a big data information service platform and integrating the online and offline systems.

“Among the three engines of economic growth—investment， consumption and export， consumption plays a major role in stabilizing growth and pushing forward economic structural reform，” said Premier Li.