E-COMMERCE: Alibaba Roars, Xiaomi and JD Purr on Singles Day

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Bottom line: Alibaba’s 60 percent sales growth on Singles Day is truly impressive, but was almost certainly boosted by merchants that delayed logging transactions on its network until the 24-hour period to help meet their sales targets.

Alibaba shatters Singles Day sales record

The numbers are in, and e-commerce juggernaut Alibaba (NYSE: BABA) has posted a record performance for this year’s Singles Day online shopping extravaganza that has surprised even me for the margin by which it surpassed last year’s record. I’ll end the suspense right away and reveal that Alibaba posted 91.2 billion yuan ($14.3 billion) worth of sales over its platforms during the 24-hour online shopping binge, up more than 50 percent from last year’s $9.3 billion. (company announcement)

To put that in perspective, Alibaba posted $112 billion in gross merchandise value (GMV) for goods sold over all its platforms in this year’s entire second quarter. That means the Singles Day total is equal to 13 percent of its entire total for the  3 months through September, quite impressive for a single day.

Meantime, archrival JD.com (Nasdaq: JD) is continuing its recent tradition of declining to give GMV figures for its platforms, almost certainly because they would be embarrassingly small compared to Alibaba’s. Instead, JD is only giving transaction volumes, with the latest figure I can find saying it hosted more than 20 million transactions on its platforms in the first 17 hours of the shopping fest. (Chinese article) It added that its transactions in the first half of the day already surpassed its total for last year.

Last but not least there’s the sputtering Xiaomi, which is also abandoning it past tradition of saying how many smartphones it sold on Singles Day as it becomes increasingly clear the company will miss its already-reduced target of selling 80 million phones this year. In this case Xiaomi is simply telling us how much money in sales it recorded during the shopping fest, with the latest figure I can find saying it sold 1 billion yuan, or about $160 million, worth of merchandise in the shopping day’s first 19 hours.

In an interesting footnote to all the hype, media are pointing out that a growing portion of Singles Day sales for everyone are coming from so-called “pre-sales”, or orders placed by people before November 11 but actually executed on the shopping day. That’s apparent in Alibaba’s numbers, which show that in just the first 90 minutes of Singles Day, it posted $5 billion in GMV. That’s equal to 35 percent of its total for the whole day, even though the first 90 minutes account for only 6 percent of the actual time on the entire day.

Delayed Buying

That makes it increasingly obvious that Alibaba’s merchants are probably finding ways to entice customers to place orders but then delay their actual purchases until November 11 so they can meet sales targets that Alibaba has reportedly set for them during the day. That’s not necessarily a bad thing, but as I’ve said previously it does seem a bit more aimed at grabbing headlines than providing a quality shopping experience.

All 3 of the companies I’ve mentioned already put out a steady stream of updated sales figures during the shopping day, so anyone who wants to see more detail can click on some of the links in this post.

I’ve already written a bit about Alibaba and JD these last few days, so I’ll close with a closer look at some of Xiaomi’s figures that continue to show a former high-flyer company trying to regain some of its former luster. Like Alibaba, Xiaomi’s sales also slowed sharply during the day, since it broke the 100 million yuan mark in the first 12 minutes of the day at its flagship online store, but then went on to notch just 1 billion yuan in sales 19 hours later. (Chinese article)

Based on the promotions I’ve seen, most of the sales seem to be for lower-end models with an average price of about 800 yuan. That would equate to sales of about 1.3 million smartphones for the first 19 hours of the shopping day, which looks a bit disappointing for a company that was hoping to sell as many as 2 million during the day. But then again, Xiaomi’s name has become synonymous with disappointment these days, and this new disappointment is just the latest sign that it’s likely to miss its 2015 sales target.

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