Alibaba opens an Aladdin’s cave for retailing
Print Edition
CHINESE Internet users spent more than 91 billion yuan (US$14.3 billion) in the world’s biggest online shopping spree on Singles Day last week. The record-breaking receipts for the November 11 event, which is inspired by Alibaba, seemed to give the lie to fears about China’s slowing economy.
The value of orders, 60 percent higher than last year, decisively lifted Singles Day above the “shopping carnival” of just a few years ago. Such strong consumer buying on digital platforms gives a boost to the economy transformation policies laid out in the nation’s recently released 13th Five-Year Plan (2016-2020), analysts said.
“It skillfully caters to consumer demands, including hardware upgrades, related policies and industrial upgrading, pushing business turnover to a new high,” said Yolanda Zhang, an analyst at International Data Corp (IDC).
By 2025, China is expected to be the biggest economy in the world, hold the largest concentration of Fortune 500 companies and have a thriving, large middle class — all factors beneficial for the development of online shopping, according to IDC, a US-based IT research firm.
According to the new Five-Year Plan, the engine of China’s economic growth going forward will be services and smart manufacturing. Online shopping is expected to be fueled by Internet Plus, Big Data, smart cities and globalization.
The revenue of China’s information, communications and technology market is expected to be US$6 trillion in the 10 years ending 2025, ticking along at annual average growth of 7 percent.
The new thrust of consumerism will affect the market and economic development in the following ways.
The trend of globalization
Goods from around the world flow into China. For the Singles Day shopping spree, Alibaba gathered together more than 5,000 overseas brands from 25 countries in sectors such as maternal and child products, cosmetics, groceries, fresh produce and clothing.
Many big foreign names, like department store Macy’s, participated.
Chinese e-commerce websites, meanwhile, are gearing up for “Black Friday” later this month — the official start of the Christmas shopping season in the West.
“For cross-border e-commerce websites, the Black Friday is the real festival,” said a marketing official of online shopping website Ymatou, which will hold a party for the Black Friday sales in Beijing.
Cross-border shopping websites like Ymatou and Amazon China offer maternal and child products, cosmetics, food, fresh produce, clothing and a full range of imported items to Chinese consumers. They will be trying to parlay that day into a Chinese shopping event.
Logistics and big data
Besides the price and product variety, logistics is always a key part of online shopping.
On the domestic front, Alibaba and JD.com both establish self-operated logistics teams and offer consumers reasonable prices and even free delivery services.
Logistic firms like SF Express have invested heavily in data analysis and automation to improve warehousing, distribution and deliveries. With Big data, consumers who order merchandise through pre-order discounts can take delivery of their purchases in one or two days.
SF Express also cooperated with Bord Bia, or Irish Food Board, to introduce Chinese consumers seafood and wine directly imported from Ireland through its own e-commerce website SF Best.
Through SF Express’s logistics network and capability nationwide, it will introduce food and other products globally to Chinese consumers, said the courier.
International firms like Amazon have integrated global logistics networks with global warehouses and shipping lines. For example, Chinese consumers can buy discounted products from Amazon US website through its Amazon China account and payment tools.
Mobiles and payments
About 75 percent of the Alibaba trade volume on Singles Day came via mobile devices, another sign of the increasing power of that medium.
With payment tools offered by Alipay and JD.com’s Baitiao, consumers can pay directly with their smartphones.
Mobile shopping is transforming consumption in China, especially the young generation, who spend hours a day on their smartphones.
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