Daily Digital Pulse Of China: Double Eleven
Alibaba and Double Eleven
Sales from Double Eleven promotions on Alibaba platforms are expected to rise 50% from last year’s sales to at least 30 billion yuan. In fact, shopping in general has shifted heavily from physical retail stores to online purchases. The day, which was originally to celebrate one’s single status or to seek out a potential partner, has become the biggest one for online shopping in China -- all thanks to Alibaba’s Tmall. The platform started marketing promotions for Singles’ Day back in 2009, and nearly all other retailers have since then followed suit. At the moment, Alibaba’s e-commerce platforms, Tmall and Taobao, absolutely dominate China’s e-tailing market. Orders for the two platforms accounted for 70% of package deliveries last year in China. It has also been reported that retailers will even operate at a profit loss, simply in order to gain market share, and as such, price wars have become merciless and brutal. Alibaba is also safe from potential Singles’ Day losses, as it doesn’t sell merchandise itself. The company comes out much farther in ahead in the competition for the largest profit margins, with a margin of 48.4%, as compared to Ebay’s 18.1% and Amazon’s 0.51%. In addition to all of the price-slashing madness, Double Eleven can also be a logistical nightmare for sellers, as order volumes can become overwhelmingly high -- which can potentially lead to many disappointing delays. Shentong Express Co., a courier firm based in Shanghai, has preemptively hired 45,000 temporary workers in addition to its established workforce of 150,000, to handle the upcoming busy season.
Double Eleven: Jingdong Look to Impress Bargain Hunters
The recent e-commerce explosion in China has seen Single’s Day transform into a blow-out shopfest, with millions of customers looking to grab a bargain and spend big. How big is it you ask? Well, to put it in perspective, Alibaba’s two e-commerce marketplaces, Tmall and Taobao collectively processes $3 billion in just 24 hours on 11.11 of 2012 – meaning these two sites processed more than double America’s entire Cyber shop on the same day. This year, Alibaba’s executives are estimating a $4.9 billion shopping spree to take place on Monday, but archrivals Jingdong are being a bit more hesitant in revealing data. Whilst not divulging numbers, Jingdong’s senior VP of public relations Gloria Li has stressed that the company would be focused on ‘winning customer trust in areas like guaranteed authentic goods and leveraging the strength of our self-operated delivery service’. Jingdong is counting on this warehouse-to-doorstep delivery service to win over customers, looking to ensure either same day or next day delivery - even when sales volumes increase massively. Since Alibaba’s e-stores outsource their logistics and have to rely on possibly over-stretched third-party delivery, Jingdong will see this as a good opportunity to promote themselves in the eyes of 11.11 customers.
Source: Tech In Asia