The rapidly expanding Alibaba group has yet another success to report. The group raked in a massive $14.3 billion in sales during the annually celebrated Singles Day this year, a significant increase of almost 54 percent from its last year’s tally of $9.3 billion.
The Single’s Day, as the name implies, is an annually held Chinese festival celebrated on November 11 (11/11) — because 1 of course, represents singles. However, an emerging human tendency to express their emotions by splurging, compounded by a whole bunch of offers and discounts put out by retailers has converted the day — from what should, in my opinion be a matter of grief — to a shopping bonanza. In fact, the day is now host to the largest amount of online shopping done in a single day, in the world.
Well, since the past few years, the Alibaba group has been making full use of the day with sales from its various online properties breaking their own records. The group recorded sales of US$5.8 billion in 2013, US$9.3 billion in 2014, and over US$14.3 billion this year. Interestingly enough, a significant portion of these sales — 69 percent, to be precise — of the gross merchandise volume were made by mobile devices, a quite remarkable jump from the 42.6 percent of sales via mobile last year.
The increase in profits generated via mobile devices bear an important testimony to Alibaba’s farsightedness in preferring to consolidate it mobile business over short-term profits. Although the company did record an initial dip in profits, the contribution of mobile GMV to the overall GMV surged quickly, going from 42 percent to 62 percent, all within the span of a single year.
Why is it significant? After all, does the device really affect the sale volumes to any significance? Apparently they do. Take China, Alibaba’s home turf, for instance. The number of consumers accessing the internet through their smartphones has seen a sudden spike and has jumped to 88.9 percent as compared to merely 42.5 percent on laptops and 68.4 percent on desktop PCs. As such, its extremely important to have a strong presence on smartphones.
To complicate matters for Alibaba, its messaging app Laiwang failed to make a dent in Tencent owned WeChat’s armour. WeChat, the immensely popular Chinese IM service, is also working on its own payment service which may mean stiff competition for Alibaba’s Alipay, considering that the former’s 650 million users may find themselves attracted to the Alipay alternative, which may just possibly see an integration with the app itself.
All in all, it is easy to see why the whooping sales on Single’s day with the significant contribution of mobile platforms, would have brought a measure of relief to Alibaba.