While double-digit sales growth and record volumes are nothing surprising for China's annual Singles Day event, some of the trends that helped drive this year's growth are worth taking note of.
Just after midnight struck in China, Alibaba (BABA) reported that the Alipay payments platform recorded RMB268.4 billion ($38.4 billion) worth of Singles Day (Nov. 11) gross merchandise volume (GMV) across Alibaba's various e-commerce platforms, up 26% annually. Growth nearly matched the 27% clip recorded last year in RMB terms.
Rivals JD.com (JD) and Pinduoduo (PDD) ran their own Singles Day promotions. JD reported its Singles Day GMV, which covers transactions taking place from Nov. 1 through Nov. 11, rose 25% to RMB200.4 billion ($28.7 billion). Unlike JD, Alibaba's Singles Day figure doesn't cover sales recorded during the first 10 days of November, but it does cover pre-orders for Singles Day promotions that have been placed since Oct. 21.
Markets are taking the numbers in stride. Alibaba's shares, which had risen more than 35% this year following a rough 2018, are down 1.3% as of the time of this article. JD's shares are up 0.7%.
Though not exactly stunning, Alibaba and JD's Singles Day numbers do arguably serve as another sign that Chinese consumer spending (bolstered some by government stimulus efforts) is relatively healthy, as China's GDP growth slows amid trade tensions and softer business spending trends.
There were also a few trends afoot that made 2019's Singles Day a little different from 2018's, and a lot different from, say, 2015's. These include:
1. Greater Participation From 'Lower-Tier' Chinese Cities
693 million consumers bought something on one or both of Alibaba's massive Taobao and Tmall marketplaces during the 12 months ending on Sept. 30, up from 601 million during the prior 12 months. And with e-commerce penetration rates already pretty high in "tier-1" Chinese cities such as Shanghai, Beijing and Shenzhen, Alibaba has indicated that about 70% of its Chinese user growth is now coming from lower-tier cities, many of which reside farther inland and have lower average incomes.
Alibaba has forecast that more than 500 million users would participate in Singles Day globally this year, up by about 100 million relative to 2018. All signs suggest that a lot of those new users were in lower-tier cities, where the company has been in pitched battle with Pinduoduo. Yesterday, Alibaba said that its sales and digital marketing arm "co-developed 1,000 quality and affordable products with 1,000 brands to meet the demands of consumers in China's lower-tier areas."
2. Bigger Promotions from Big Brands
Alibaba claims that 64 Chinese and foreign brands each recorded more than RMB100 million ($14.3 million) worth of Singles Day pre-orders, twice as many as last year. The list includes cosmetics brands such as Estée Lauder and L'Oréal, as well as electronics brands such as Apple (AAPL) and Philips.
For Singles Day overall, Alibaba says that 299 brands saw their GMV top RMB100 million, and that 15 of them -- including the aforementioned companies -- saw GMV surpass RMB1 billion ($143 million).
3. Live-Streaming Takes Off
Alibaba claims that more than half of the merchants on Tmall, which caters to larger merchants and brands, used live-streaming to help sell products during Singles Day. And ahead of Singles Day, the company claimed that the number of merchants on its platform to use live-streaming to promote products has risen by 200% this year.
"Virtually everybody uses live-streaming to connect with the consumer," said Alibaba spokesman Brion Tingler ahead of the event. It's worth pointing out that China's embrace of live-streaming goes well beyond e-commerce. Among other things, gaming live-streaming platforms Huya (HUYA) and Douyu (DOYU) have been seeing tremendous growth, and Tencent Music (TME) has seen strong uptake for its Kuwo Live music live-streaming service.
4. Expanding Singles Day's Reach
While the lion's share of Alibaba's Singles Day GMV still involves (from all indications) sales to Chinese consumers shopping on Tmall and Taobao, the company also now runs promotions for its Ele.me food delivery/local services platform and its technology-packed Freshippo supermarkets. The likes of Starbucks (SBUX) , KFC and Burger King reported that their Singles Day sales via Ele.me surpassed last year's totals less than two hours into the event.
Alibaba is also now running promotions on platforms that cater to non-Chinese buyers, such as Alibaba.com, AliExpress and the Southeast Asian Lazada marketplace. During its September quarter, Alibaba's international commerce operations accounted for 7% of its revenue, and its "local consumer services" operations accounted for 6% of revenue.