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China’s holiday season starts on Singles’ Day

Editor: Tong Xinxin 丨CCTV.com

11-11-2015 17:19 BJT

By Tom McGregor, CNTV commentator

While Westerners celebrate Christmas on Dec. 25, the Chinese cherish the Spring Festival, a 5-day holiday usually set around February. Hundreds of millions of Chinese families travel far and wide to meet their relatives, bearing gifts for young and old.

Christmas-time has transformed into a shopping frenzy for the West that regularly begins on ‘Black Friday,’ one day after US Thanksgiving Day.

The Chinese have its holiday season starting weeks earlier, which would be on November 11, originally dubbed, ‘Singles’ Day’, and now known as ‘Eleven Eleven.’

Ironically, Singles’ Day, starting in 1993, intended to help lonely Chinese singles save face by encouraging them to buy gifts for themselves. Later on, e-commerce giant Alibaba, operator of Web retail platforms including Tabao and TMall, launched its ‘Eleven Eleven’ promotions in 2009 offering steep discounts for e-commerce buyers.

Ever since, Chinese consumers have fallen in love with e-commerce and today, Singles’ Day could be considered the unofficial start of China’s holiday shopping season.

1

Record-shattering sales

For the past few years, Alibaba has exceeded its sales expectations for ‘Eleven Eleven’ with today’s figures on pace to shatter all previous records. ChannelNewsAsia reports that in the first hour alone, its e-commerce sales have generated over $US3.9bn, compared to $US2bn, recorded in the first hour of ‘CyberMonday’ last year.

Alibaba has nearly 130 million users, visiting the online marketplace app - Taobao, which has already exceeded its sales peak volume in 2014. The total number of buyers was 27 million in its first hour.

Net total sales via AliPay (Alibaba’s online cash payment system) had exceeded $US1bn. In the first eight months, while Alipay accounted for 72 percent of gross merchandise volume (GMV).

Nonetheless, sales records could be skewed, since many purchases online had occurred days in advance, with the transactions settled on Nov. 11.

“One day was not sufficient for most people to fulfill their bargain-hunting needs,” Oceanne Zhang, Shanghai-based e-commerce Kantar Retail, told the Guardian.

Stirring up rural expansion

Historically on Singles’ Day, most Chinese e-commerce sales were transacted in the wealthier, Eastern coastal and South regions, but nowadays the rural regions are witnessing strong growth momentum.

“E-commerce is becoming more important in the rural areas with limited retail infrastructure,” Ding Jie, partner at Bains & Company, consulting firm, told Xinhua news. “It’s not like the US where big retailers like Costco and Walmart can be found in small cities.”

Ding added, “For China, small cities and towns, digitization has arrived before industrialization.”

E-commerce retailers must upgrade rural logistics networks to ensure faster and more reliable deliveries to rural consumers. The costs will increase, but farmers are expected to enjoy higher incomes in the years ahead.

Alibaba vs. JD.com

Corporate rivalries can be fun to watch, such as McDonald’s vs. Burger King; Coca-Cola vs. Pepsi; Exxon vs. Shell and Mercedes Benz vs. BMW. China has its own nitty-gritty feud between e-commerce giants Alibaba and upstart rival, JD.com

Barrons news cited a press release issued by Alibaba last week that mocked JD.com as a “chicken” and ‘crybaby’ undeserving of sympathy in a competitive marketplace. Alibaba was responding to JD.com filing a complaint against them with the State Administration of Industry and Commerce, a consumer protection agency.

JD.com claimed Alibaba is bullying merchants, prohibiting them from participating in promotional events with its e-commerce competitors. JD.com has also frequently accused Alibaba of selling counterfeits and shoddy products online.

For the year-to-date, JD.com share price has risen 27 percent, while Alibaba is down 20 percent.

Getting into a holiday spirit

E-commerce is good for China, creating opportunities for smaller merchants to expand nationwide. Chinese consumers are happy, because they can avoid large crowds at retail markets. The greater convenience adds for greater comfort for the lengthy holiday season.

Tmcgregorchina@yahoo.com 

 

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.


 

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