Singles Day: Alibaba sales blitz rakes in $75 billion as Chinese shake off Covid-19

Chinese regulators halted the biggest IPO in history -- fintech giant Ant Group that was set to raise $37 billion -- days before its scheduled listing in Shanghai and Hong Kong. CNN's Selina Wang reports.

Posted: Nov 12, 2020 5:20 AM
Updated: Nov 12, 2020 5:20 AM

China's annual Singles Day online shopping bonanza regularly hauls in tens of billions of dollars for Alibaba and other e-commerce and retail companies in China. This year, it's taking on new meaning as a showcase for the country's success in battling the Covid-19 pandemic.

Alibaba said on Thursday that the annual sales frenzy broke records again, raking in 498.2 billion yuan (roughly $75 billion). The total includes an earlier three-day period that was added to boost post-pandemic sales.

Compared to the same timeframe as last year, this year's haul represents an increase of 26%, the company said.

"China's economy has seen a strong recovery and Chinese consumers' purchase behaviors have already returned to pre-pandemic levels, if not higher," according to Xiaofeng Wang, analyst with market research firm Forrester.

China reported positive economic growth for the second quarter in a row last month, underlining how quickly the world's second-largest economy has recovered from the pandemic.

For brands and retailers scrambling to recover from months of shuttered shops and consumers hunkered down indoors, the lucrative Chinese shopper is a much-needed bright spot. Many companies "are doubling down" on their Singles Day sales events, according to Wang.

A survey from market research firm Oliver Wyman found that 86% of Chinese consumers are willing to spend the same as or more than what they did during last year's Singles Day.

Chinese shoppers "continue to spend like crazy," said Oliver Wyman partner Jacques Penhirin, who led the survey.

The remaining 14% of survey respondents said they will spend less on Singles Day, because the pandemic had brought too much uncertainty for them.

Penhirin predicted the event would be massive for participating brands and retailers, because shoppers are using it as an opportunity to treat themselves.

It's been a strange year for Chinese consumers. They saved money during an unpredecented lockdown earlier this year, but they aren't traveling, said Penhirin.

So shoppers are approaching Singles Day with an indulgent mindset. For example, a shopper who usually buys Maybelline makeup, he said, might instead spend a bit more to buy stuff from Yves Saint Laurent on sale.

"Now it's time to be indulgent," Penhirin said.

Glitzy stars and blockbuster growth

Singles Day regularly racks up bigger sales than Black Friday and Cyber Monday combined.

The event — also known as Double 11 — is pegged to China's informal, anti-Valentine's Day holiday that celebrates people who aren't in relationships. It takes place on November 11, a date that was chosen because it is written as four ones, or singles.

Alibaba started offering Singles Day discounts in 2009 and has since turned the event into a bonanza of online shopping.

Other Chinese e-commerce platforms like JD.com, Pinduoduo and Red, as well as regular brick-and-mortar stores also take part. Rival JD.com's event lasts almost two weeks — longer than Alibaba's. JD said on Thursday that it also set a new sales record of 271.5 billion yuan ($41 billion) during the event, growing 33% compared to last year.

The event has also gained traction outside China: Alibaba's Southeast Asia subsidiary Lazada offers Double 11 discounts in Singapore, Malaysia, Indonesia, Thailand and Vietnam.

In China, Alibaba once again held a glitzy live concert counting down the hours until the main sales day starts. Celebrities often make appearances at the so-called 11.11 Gala, usually to hawk their own brands and products.

Last year's headline performer was singer Taylor Swift. This year, it's Katy Perry, who was virtually piped into a Shanghai arena late Tuesday evening.

This year, the company added an extra three days of sales — which took place from November 1 through 3 — because of the pandemic, according to Alicia Yap, managing director at Citigroup Global Markets Asia.

A few more days of huge discounts help "brands or merchants recoup lost sales during the lockdown and [helps] global brands gain access to the stronger demand from Chinese consumers," Yap wrote in a note last week.

Trends for this unprecedented year

Livestreaming is expected to be a "key growth driver," for this year's Double 11, said Wang, of Forrester.

Livestreaming had been around in China for years, but really took off during lockdown.

It's like the Shopping Channel or QVC on steroids: Shoppers tune in to watch influencers peddling everything from cars to mangoes, and can score big discounts during the live streams.

Wang also expects luxury goods will sell really well, because Chinese usually buy them while traveling overseas.

"When pandemic makes international travel impossible, consumers will pivot these purchases domestically and particularly online," she said. "That's also why it's the first year that luxury brands are heavily involved in Singles Day."

Oliver Wyman found that while foreign brands continue to dominate popular Singles Day categories such as cosmetics and infant formula, a growing number of Chinese shoppers will buy local brands of products like electronics and smartphones this year.

"It's not patriotism ... it's just the technology, design and quality are better, therefore there is just more confidence" in Chinese brands, Penhirin said.

Another reason Chinese are buying local is because some remain cost conscious post-pandemic, according to analysts at consultancy Bain & Company.

Shoppers, for example, may view Apple's iPhone as too expensive, and instead buy slightly cheaper devices from Huawei or Xiaomi that they believe are comparable in design and technology.

Alibaba's Jack Ma out of favor with Beijing

There was an added shadow over the event for Alibaba and its billionaire founder Jack Ma. Last week, Chinese regulators slammed the brakes on the highly anticipated IPO of Ant Group, Alibaba's financial affiliate, at the eleventh hour. Regulators cited "major issues" that might cause Ant "not to meet the listing conditions or disclosure requirements."

Ma publicly criticized Chinese regulators for stifling innovation, which industry watchers noted may have also played a role in the IPO getting pulled.

Even though many other online platforms and stores take part in Singles Day, it is still closely tied to Alibaba. And recent criticism of the annual event by government groups and state media could signal that Ma is still out of favor with Beijing.

The Chinese government has said it is eager to stimulate domestic consumption to spur the country's economic growth. And yet the China Consumers Association, a state-backed national consumer rights group, urged for "rational consumption" during the upcoming Double 11 shopping season, according to statements it issued last week.

State-run news network CCTV called for "fewer tricks" by shopping platforms during the Singles Day shopping season, saying they should not cheat consumers.

But a spat between a tech billionaire and Beijing regulators likely won't affect how Chinese consumers shop, according to Penhirin of Oliver Wyman.

"Consumers don't care, honestly," he said, adding that while financial markets might be paying attention to the drama, consumers will think that "as long as I get a good deal, it's none of my business."

-- Laura He contributed to this report.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 261167

Reported Deaths: 5713
CountyCasesDeaths
DeSoto17561191
Hinds16687329
Harrison14050202
Rankin11102217
Jackson10729188
Lee9014143
Madison8495168
Jones6607114
Forrest6135122
Lauderdale6067192
Lowndes5490120
Lafayette511794
Lamar499865
Washington4904125
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Monroe3651106
Warren3649103
Union353263
Marshall352069
Neshoba3464154
Pearl River3422105
Leflore3090109
Lincoln304287
Sunflower290373
Hancock288461
Tate279062
Alcorn270754
Pike268180
Itawamba266662
Scott256048
Yazoo253756
Prentiss251153
Copiah247649
Tippah247550
Coahoma245954
Simpson241471
Leake236167
Grenada222471
Marion220273
Covington219072
Adams212370
Wayne208432
Winston205870
George203539
Newton197346
Attala196461
Tishomingo193861
Chickasaw188444
Jasper177838
Holmes171368
Clay164237
Tallahatchie155635
Stone149525
Clarke144762
Calhoun139922
Smith127725
Yalobusha121134
Walthall114037
Greene112929
Noxubee112225
Montgomery111236
Carroll106422
Lawrence105617
Perry104031
Amite100826
Webster95424
Tunica88221
Claiborne87825
Jefferson Davis87727
Benton84823
Humphreys84224
Kemper80020
Quitman7049
Franklin69617
Choctaw62513
Wilkinson59625
Jefferson56520
Sharkey44817
Issaquena1606
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Alabama Coronavirus Cases

Cases: 436087

Reported Deaths: 6486
CountyCasesDeaths
Jefferson63969994
Mobile31211565
Madison27851208
Tuscaloosa21233271
Montgomery19698326
Shelby19093130
Baldwin16981188
Lee13036105
Morgan12526134
Etowah11987179
Calhoun11441206
Marshall10357123
Houston8886158
Limestone827876
Cullman8203108
Elmore8120104
DeKalb7828103
Lauderdale7798103
St. Clair7763125
Talladega6394111
Walker6002177
Jackson594644
Colbert545276
Blount543986
Autauga532761
Coffee456762
Dale406883
Franklin372448
Russell349212
Chilton342873
Covington336068
Escambia330144
Dallas312096
Tallapoosa3120107
Chambers301170
Clarke293336
Pike261131
Marion251558
Lawrence250752
Winston232742
Bibb221248
Geneva208746
Marengo206529
Pickens199031
Hale182742
Barbour179337
Fayette177029
Butler172459
Cherokee164330
Henry158224
Monroe151320
Randolph144336
Washington140127
Clay129146
Crenshaw122944
Macon120937
Cleburne120724
Lamar119721
Lowndes113736
Wilcox106622
Bullock102228
Perry99118
Conecuh96821
Sumter90026
Greene76823
Coosa63215
Choctaw51724
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