Alibaba Group's e-commerce holiday draws U.S. brands to China

Almost half Alibaba Group's 11.11 sales came via smartphone.
Almost half Alibaba Group's 11.11 sales came via smartphone.

The 11.11 "Singles' Day" festivities -- China's answer to Cyber Monday -- got a massive boost from smartphone transactions from the U.S. and elsewhere

HANGZHOU - Consumers have spent more than RMB 35 billion (US$5.7 billion) over Alibaba Group’s e-commerce platforms as of 1 p.m. Tuesday, beating last year's total for the 11.11 shopping festival after just 13 hours.

Most significantly, nearly half of sales (46 percent) have come via smartphones and other mobile devices, as denoted by 'mobile GMV' in the screen on the right. Last year mobiles accounted for about 25 percent of sales.

The screen, in an auditorium at Alibaba Group’s headquarters in Hangzhou, offers near-real-time statistics such as sales totals and geographical data. The strongest overseas traffic is coming from Hong Kong, the U.S. and Taiwan.

With more and more Chinese consumers shopping on mobile phones this year, Alibaba Group COO Daniel Zhang said technology was used to optimise their 11.11 shopping experiences, with software algorithms predicting and displaying items people might like on their phones.

A total of 27,000 merchants and 42,000 brands have been parading their wares since the start of November. The favorites? Adidas, Jack & Jones, Uniqlo, Xiaomi, and even honey from New Zealand and sea cucumber from America.

Previous "Double-Eleven" shopping festivals have been limited largely to the mainland. But for the first time this year, Alibaba is rolling out the sale worldwide, involving its B2B shopping websites AliExpress and Tmall Global in addition to and Taobao Marketplace.

"The cross-border drive is about being able to offer your customers everything they want in one place," said Burghardt Groeber, vice president of Greater China at Hybris. "If you can do that they will never even consider using another platform. It's a virtuous cycle — attract more Western sellers to your platform; offer more products; get more buyers; and then you get even more Western sellers. The potential for cross-border and global commerce is enormous."

The underlying theme of this year's event is "go international," which Alibaba CEO Jonathan Lu has stressed many times. "Chinese consumers have a tremendous desire to buy overseas products, and Alibaba knows this," said Julia Zhu, founder of Observer Solutions, a Chinese e-commerce research and advisory firm.

Watch McCann Worldgroup Shanghai's work for Tmall above, which certainly wasn't understating that desire, with lines in the commercial like "I want to taste the sweetness of being out of control" and "I want to fill all the holes in my heart [with shopping]."

Alibaba's going-global ambitions this year will be another test of its e-commerce ecosystem, especially its affiliate companies such as e-payments provider Alipay and shipping and delivery consortium China Smart Logistics. Payments, logistics and post-sales service will continue to be the most challenging aspects of cross-border e-commerce, said Zhu. This mainly falls on the speed of logistics across country borders and the necessity of customs clearance for some special categories like seafood.

Over the long-term though, the cross-border e-commerce trend has huge potential and is worth attention. Liu Xiaobin, vice president of Nielsen China, told Campaign Asia-Pacific that more mature cross-border ecommerce will bring a positive impact on future online sales.

"We believe a bigger number of online shoppers turning to cross-border ecommerce will help the progress of domestic companies in product upgrades and innovation, which in the end, will be a good boost to China’s overall consumption trade-up," Liu said.

Sam Holt, VP of Performics China, is a little more skeptical about the heavy hype around the impact of overseas buyers on 11.11 sales. "Brands and platforms will need to tailor their offers, design and approach to match different cultures," he said. "Western design is often simple and very clear, but Chinese design can be a bit busier with more information on the page. The Chinese know exactly how to navigate and use Taobao/Tmall and other sites, but there is education to be done for the rest of the world."

As for payment models, pay-on-delivery is not available overseas. And Alipay is good for Chinese people, but the adoption of PayPal or other overseas payment models will be a key challenge, added Holt.

"One of the challenges that doesn’t get talked about much in the e-commerce space is physically getting the products into China and distributed to the buyer especially if they are airfreighted in,"  Groeber said. "The number of slots for freight at the major airports are significantly limited and the challenges of traffic delivery in the major cities are well known, and could be something for retailers engaging in cross-border e-commerce to watch out for."

Besides Alibaba, the diverse and competitive e-commerce market has seen a quick catch-up from other major shopping sites. As indicated in Nielsen’s survey, purchase intention for 11.11 on JD, Amazon, Suning and others increased 79 percent compared with last year.

The Singles' Day campaign, however, is more about short-term sales rather than long-term business growth, pointed out Vanessa Zeng, senior analyst at Forrester Research. For brands looking to build up their omni-channel strategy, they need to first have an understanding of overall digital business and then develop a feasible road map, she said.

The marketing of the festival itself might be due for an update before next year as well. "It has gone from a big promotion day to a national festival, and people have high expectations of ‘shopping’ on this day," said Ellen Hou, group managing director of McCann Worldgroup Shanghai. "We forecast that next year, when people start to talk 1111, people would talk more about the purpose of shopping rather than how much things they’ve put into basket. Tmall would take a real cultural leadership on that."

This article first appeared on

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