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Wednesday 11 November is arguably the most important day of the year for retail sales in China as it celebrate Singles Day. This is a relatively new phenomena, having originated in the early 90s as a way for singles – predominantly at universities – to celebrate due to the number of single digits in the date.
Much like Western society, the commercialisation of the day has expanded aggressively, triggered by Singles Day in 2011 which had six ‘ones’ in its date. This has become so important to the retail community that Alibaba has even trademarked ‘Double 11’. Originally this process had started off with restaurants and bars but has quickly now moved to online shopping.
The eleventh of November provides not only a sizeable percentage of Alibaba’s monthly revenue but a noticeable percentage of the business’s annual revenue. Alibaba’s online sales for the day in 2013 were $5.8 billion which jumped to $9.3 billion in 2014 and is expected to jump once again, especially as the People’s Bank of China has relaxed the regulations for banks to lend to the retail public. To put this in to some sort of context, last year’s sales were more than four times the volume of sales in the US on Cyber Monday and more than Black Friday and Cyber Monday combined.
Alibaba controls a sizeable market share of Chinese online shopping; somewhere between 65-70 per cent or $300 -$350 billion on an annual basis. It is estimated that of the 1.3 billion Chinese citizens, around 600 million are internet users– larger than the 550 million in Europe and 280 million in the US. Unsurprisingly, Western retailers have also joined in, with brand names like Costco, Walt Disney, Lego, Fischer-Price, Apple, Burberry, Macy’s and Calvin Klein all heavily involved in offering discounted product ranges for the day.
Investors will be monitoring to see which Western-quoted companies have been most successful in tapping into this annual event and subsequently will have boosted their annual sales.