China’s Singles’ Day Smashes Previous Revenue Record

2020 a record-breaking year . . .

Alibaba announced yesterday that it saw US$75.1 billion in sales from Singles’ Day on November 11, almost doubling last year’s revenue of US$38.4 billion. Singles’ Day, named for the abundance of single digits on the 11/11 date and initially created by Chinese university students in the 1990s as an antithesis to Valentine’s Day, has become the world's largest sales event. The online shopping celebration only became an economic juggernaut in 2009, when Alibaba’s Jack Ma promoted it as a holiday and began to offer deep discounts and free shipping on Alibaba’s platforms. Many other Chinese e-commerce platforms have since followed suit.

Why the big jump in revenue?

Extended sales dates partly explain this year’s massive increase – Alibaba added three additional days earlier in November, and many other platforms held continuous sales from November 1 through November 11. An increase in purchases of luxury goods also contributed to the jump. Many Chinese citizens who would otherwise have purchased luxury goods while travelling abroad turned to Singles’ Day sales for their retail fix. Others credit the boost to increased sales livestreaming in which brands showcase their products and provide live discounts in a format akin to The Shopping Channel (on steroids). Despite existing for years in China, livestreaming has seen a significant uptick in interest during COVID-19 restrictions, with two-thirds of Chinese consumers stating that they have purchased a product through a livestream in the past 12 months.

Yet e-commerce stocks fall . . .

Despite the massive Singles’ Day revenue gains, e-commerce platforms like Alibaba and JD saw stock prices drop on Wednesday on the back of new draft anti-monopoly regulations released on Tuesday by the State Administration for Market Regulation. These rules target online platforms to curb anti-competitive behaviour, such as predatory pricing, preventing merchants from working with rivals, and sharing consumer data. The new draft regulations are consistent with the recent government narrative portraying these platforms as having too much influence over China’s economy. Experts caution that the announcement signals difficult times ahead for online platforms in the country of 1.4 billion.