11.11 Sales: Alibaba posts record sales for Singles Day, but growth is slowing

However its momentum is significantly slowing down as China’s economy weakens and as Beijing has tightened its grip on the tech business.

Alibaba mentioned that complete gross merchandise quantity (GMV) reached 540.3 billion yuan ($84.5 billion) via the primary 11 days of November, culminating within the vacation on Thursday. That is a rise of 8.5% from a yr in the past — far decrease than the highest finish of a forecast just lately given by analysts at Citi, who anticipated as a lot as a 15% enhance, or 578 billion yuan ($90 billion). It is also under the low finish of that analyst forecast, some $86 billion.

This yr’s determine is an enormous slowdown from the 26% soar Alibaba posted final yr, in comparison with 2019.

The Citi analysts wrote Friday that whereas this yr’s numbers had been worse than they predicted, “it was not completely sudden” given robust competitors, a slowing financial system and softening client sentiment.

Smaller rival (JD) fared higher, recording 349.1 billion yuan ($54.6 billion) in gross sales by GMV. That was up 28.6% from a yr in the past — although nonetheless slower than the 33% development fee it hit final yr.

Inflation complications

Alibaba (BABA) launched the primary Singles Day Buying Pageant on November 11, 2009. The occasion, which is often known as Double 11, is pegged to China’s casual, anti-Valentine’s Day vacation that celebrates individuals who aren’t in relationships. The date — 11.11 — was chosen as a result of it’s written as 4 ones, or singles.

Since that first incidence, Singles Day has ballooned right into a buying frenzy noticed not simply by Alibaba, but additionally by different e-commerce firms that supply their very own steep reductions and promotions. Offers happen over a number of days and even weeks. It has additionally unfold exterior of China, with Alibaba’s Southeast Asia subsidiary Lazada providing offers in Singapore, Malaysia, Indonesia, Thailand and Vietnam.

It is an extremely profitable occasion, however client sentiment could also be taking successful this yr due to headwinds dealing with China’s financial system.

GDP is growing at the slowest pace in a yr as power woes, delivery disruptions and a deepening property disaster take their toll on the world’s second largest financial system.
Inflation, meanwhile, has risen, which threatens to erode revenue margins and the buying energy held by customers.

The price of items leaving China’s factories surged by one other file fee final month — China’s Producer Value Index jumped 13.5% in October from a yr in the past — and there at the moment are indicators that the upper prices are trickling down. China’s Shopper Value Index rose 1.5% in October from a yr in the past, double the speed of the earlier month and the quickest tempo of enhance since September 2020.

“On the one hand, the hovering enter prices have considerably squeezed the revenue margin for downstream producers, which in flip limits the house to supply a big low cost this yr,” mentioned Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis, a French funding financial institution. “On the opposite, home consumption is just not but again to pre-pandemic stage[s] and even on-line retail gross sales, which remained comparatively resilient in 2020, have decelerated.”

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Crackdown woes

A sweeping authorities crackdown over non-public enterprise additionally solid a shadow over this yr’s Singles Day.

Beijing final yr launched sweeping marketing campaign in opposition to a variety of industries, and e-commerce companies have been below significantly harsh scrutiny.

Alibaba was hit earlier this yr with a record $2.8 billion fine for behaving like a monopoly, and the corporate has shed a whole lot of billions of {dollars} in market worth as Beijing’s reforms take form., Tencent, Pinduoduo, Meituan and different firms have additionally been investigated or fined over alleged anti-competitive habits.

As strain grows, lots of firms have rushed to donate billions of {dollars} from their very own earnings to government-based social causes, after President Xi Jinping makes clear his precedence to redistribute wealth and achieve “common prosperity.”
Alibaba has pledged to donate 100 billion yuan ($15.6 billion) by 2025 in assist of Beijing’s “frequent prosperity” marketing campaign. Pinduoduo mentioned in August it could give its entire profit for the June quarter to rural improvement initiatives in China, and anticipated to donate a complete of 10 billion yuan ($1.5 billion) towards such causes. unveiled a plan late final yr to “revitalize rural China” utilizing cash and its logistics infrastructure.
Singles Day has entered Beijing’s sights, too. On Saturday, the State Administration of Market Regulation — the nation’s anti-trust regulator — banned e-commerce platforms from taking part in unfair practices throughout the vacation buying interval, resembling “elevating costs of things earlier than placing them on sale.”
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Final week, the Ministry of Industry and Information Technology, which abroad the web business, summoned Alibaba,, Pinduoduo and Meituan and warned them in opposition to spamming customers with advertising messages throughout Singles Day.

“The large web platforms look like extra cautious in advertising and promotions this yr to chorus from breaching the antitrust rules,” mentioned García Herrero from Natixis.

Supporting Beijing

Corporations are additionally speeding to assist authorities initiatives meant to spice up social equality or to reduce carbon emissions — each amongst Xi’s prime coverage targets. Local weather has been a selected focus, with China this week even pledging to ramp up its climate ambitions in an settlement with america. (China, although, remains to be the world’s largest coal client and earlier didn’t signal on to an announcement at COP26 committing to phasing out using coal.)

Alibaba mentioned they’d shift focus from pure gross sales figures — often annually’s headline — to sustainability and inclusiveness.

“This yr’s Pageant marks a brand new chapter for 11.11,” mentioned Chris Tung, chief advertising officer of Alibaba Group, in an announcement. “We consider we should leverage the ability of 11.11 to encourage sustainable improvement and promote inclusiveness to customers, retailers, and companions throughout our ecosystem.”

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The corporate mentioned it would showcase energy-efficient merchandise on its companies and provides out 100 million yuan ($15.6 million) price of “inexperienced” vouchers meant to encourage individuals to purchase extra sustainable merchandise. It additionally wished to scale back the occasion’s carbon footprint by recycling the packaging it makes use of.

The corporate additionally mentioned it wished to assist “weak populations,” and its Taobao app has launched a “senior mode” possibility. The brand new function is designed to be extra accessible for the aged with an up to date interface and voice-assisted expertise. additionally introduced this yr’s Singles Day could be “the biggest one the place renewable power is used, and one the place [] will push for a decreased carbon footprint.”

CNN Enterprise’ Paul R. La Monica contributed to this report.

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