Alibaba smashes Singles' Day record, passing S$12.8b in sales by midday

Attendants watching real-time data of transactions at Alibaba Group's 11.11 global shopping festival in Beijing on Nov 15, 2015.
Attendants watching real-time data of transactions at Alibaba Group's 11.11 global shopping festival in Beijing on Nov 15, 2015. PHOTO: REUTERS

BEIJING (BLOOMBERG) - Mr Jack Ma took Alibaba on the road to Beijing in search of a new Singles' Day sales record, and it worked.

Transactions on this year's event passed 57.1 billion yuan (S$12.8 billion) before midday, eclipsing the 2014 mark with another 12 hours still to go.

Alibaba's Singles' Day turnover may soar to 87 billion yuan, according to researcher IDC. The prediction for a record comes as China rebalances the economy away from relying on investment towards greater consumption. China is releasing October retail sales figures on Wednesday (Nov 11) afternoon.

Alibaba moved the base for its annual shopathon to the former Olympic aquatics centre in the capital as Mr Ma tries to reverse the company's US$55 billion plunge in market value. Shifting from its Hangzhou home to the heart of Chinese power shows Alibaba's ambitions to maintain growth, penetrate the northern region where rival is based and answer the government's call for "national champions" in technology.

Going to the political, economic and media hub comes after Alibaba's roller-coaster first year as a public company. A record offering was followed by a record fall below the initial price, allegations the company wasn't doing enough to fight counterfeits on its platforms, and the replacement of its chief executive officer.

Mr Ma kicked off the event with a four-hour variety show that included a performance by American Idol finalist Adam Lambert and an appearance by Daniel Craig, star of the James Bond films. House of Cards star Kevin Spacey also made a YouTube video.

Alibaba estimates that 1.7 million deliverymen, 400,000 vehicles and 200 airplanes will be deployed to handle packages holding everything from iPhones to underwear.

Simultaneously, China's economic expansion slowed to a 25-year low, putting pressure on corporate profits. Yet Alibaba was able to post quarterly sales that climbed by almost a third after it boosted advertising targeting shoppers able to hold on to more of their money.

"We're seeing more and more consumers shifting to mobile," CEO Daniel Zhang said on Tuesday night. "That's why we've prepared special promotion sessions during peak commute hours, so people can shop on their phones."

That was underscored by data from Alibaba showing that 27 million people were shopping on mobile phones, fuelling 72 per cent of early sales.

The nation's per capita disposable income rose 7.7 per cent in the first nine months from a year earlier - after adjusting for inflation - outpacing the 6.9 per cent rise in gross domestic product. Participation and spending by consumers is expected to increase this year, with clothing and footwear being the most popular category, according to a survey by Nielsen Holdings.

Singles' Day, a Chinese twist on Valentine's Day, was invented by students in the 1990s, according to the Communist Party-owned People's Daily. When written numerically, the date is reminiscent of "bare branches", the Chinese expression for bachelors and spinsters.

The Singles' Day promotion started by Alibaba on Nov 11, 2009, was copied by rivals and has morphed into China's biggest excuse to shop online. Some of the world's most popular brands - including Apple, Nike, Lego - flood Alibaba's websites with promotions and discounts.