Alibaba’s 2019 China “Singles' Day”: The record-breaking performance and the strategies behind it

Yet another glorious Double Eleven for Alibaba: A whopping total USD 38.3 Billion was registered on one single day, 11th Nov 2019 for Tmall，formerly Taobao Mall，Chinese online retailing platform operated by Alibaba.

Within just 1 minute and 36 seconds, the platform has reached GMV (Gross Merchandise Volume)-a term used to indicate a total sales dollar value for merchandise, of CNY 10 Billion (USD 1.4 Billion) sales mark. After only 16 hours and a half, the platform has already broken last year's full-day record of CNY 213.5 Billion (USD 30.48 Billion).

Source: Data from Alibaba and Sina Weibo

It's quite interesting to see how passionate Chinese consumers are for the Double Eleven Shopping Bonanza. JLSolution has mapped out the sales marks reached by Tmall overtime during the 24-hour event on 11th November as the chart above.

Source: Data from Alibaba and Sina Weibo

Within the first hour, which is the period from midnight at 0.00 local time to 1.00 in the morning, sales surged 1110.0% while the GMV growth rate every 4 hours during the other hours after 2.00 a.m.is so much lower than this, and in the trend of declining over time. The enthusiasm from Chinese consumers was fired up due to the approximately 4 hour long Double 11 Gala, called "Mao Wan" (the homophone for this is "The Cats' night" in Chinese). The name is also very similar to "Chun Wan"(The name for the yearly largest celebration for Chinese lunar New Year), which represents Jack Ma's ambition in making the Double 11 Gala the second-biggest yearly celebration for every Chinese.

The Gala invited American singer like Taylor Swift and Japanese singer Kana Hanazawa, as well as many popular Chinese local artists. What's new is this year has seen many Millenium and Generation Z young celebrities showing themselves on the stage. This is possibly the effort for Tmall to attract and seize more young customers.

The Gala ends by midnight, sending the joy and excitement from the audience directly to the start of the Double 11 Shopping Spree. People flocked to their site and fought for the shopping vouchers, could not wait to empty their pockets and place their orders, which pushed the sales up to CNY 10 Billion within merely 1.5 minutes.

After 2 a.m., most customers fell asleep, the sales growth rate per every four hours fell to a very low level until people wake up at 8 in the morning. However, the frenzy has already worn off the next morning, the GMV growth rate continues to decrease during the day, but gladly, still adding up to the total sales figure steadily until the end of the day.

This is the 10th year of Alibaba’s “Singles' Day” Shopping Festival. The firm reached GMV 13 Billion every 11th November for the past three years consecutively.

Alibaba's Double Eleven has become the world's largest shopping festival, surpassing the USA's Black Friday for the past three years as the chart shown below:

The best strategy which contributes to Alibaba's success is possibly not the subsidies it claims to offer in this shopping festival, but the delicate web it wove beforehand to capture its prays.

"Preorder" the Customers

Tmall started to invite its customers to preorder way before the actual Double Eleven date (from mid-October). Some people from the online retailing industry argue that this is because the merchandisers need to understand what and how much their customers might need from them, in order to lower the cost of SKU(stock keeping unit). But most of the goods purchased online during this shopping spree are from big brands. They usually have large inventories and well-established supply chain networks, agile in front of most urgent situations. It's hard to imagine big names like them would be needing "pre-notice" from their customers in the face of a shopping event.

The reason behind this is very simple, just to steal and seal most of the deals in fierce competition.

Tmall is not the only player in this E-commerce hunting game. It has to face a strong competitor JD.com, as well as newly risen stars like Pinduoduo and the like. During the past few years, Tmall and JD had all tried to learn from Pinduoduo's success, by cooperating with other Chinese Social network giants like Tencent to introduce social shopping; lowering down cost via supporting local small manufacturers and factories, and claiming to lower down price level through subsidies.

However, the customer pool for E-commerce in China is not likely to be expanding extensively any further in the short term. How to compete with other platforms when the goods offered are almost identical, and the price does not differ too much to each other？

Tmall, therefore, comes out with a clever strategy, to lure customers in advance. Invite them to pay a little amount of money front, then fill the rest when Singles' Day comes. The platform could promise customers with a stunningly lower price during the shopping festival if they preorder to secure Tmall's own groups of customers beforehand. The "afraid of being left out" human nature and the sense of insecure and urgency (fear that the price will go up if they do not preorder, and the goods will be sold out if they do not place orders beforehand)helps with the success in Tmall's game of "Preordering" their customers.

Then the Gala helps to create the excitement and joy for customers to finally hit the button to complete the orders.

It's a well-orchestrated and performed symphony, aiming at the iron throne in this year's Double Eleven, shining with the wisdom of top sales strategies and the deep understandings of its Chinese customers.

A whole new sales trick: Live Streaming Room

According to the speaker man from Alibaba on 12th Nov, the customer shopping data suggests approximately USD 2.86 billion of revenue was generated through a new channel, the Taobao Live, which is a live streaming app which allows any mobile user to watch and interact with the hosts in the live-streaming rooms.

There is a growing trend in recent months that key opinion leaders on mainstream Chinese social media, such as Weibo are doing marketing work for Chinese companies by introducing products verbally, releasing testing videos and photos of products. Also, multiple live streaming services are gaining popularity among the Chinese public.

Tmall makes advantage of this newly emerged phenomenon to promote the products via their live streaming service called Taobao live, where the internet opinion leaders cooperate with companies to introduce products in their rooms. This method ensured more than 50% of Merchandisers on the platform achieved growth via hosts' introduction via Taobao Live streaming rooms.

Tmall and JD also have been eyeing on the lower-tier cities in China to fish for customers. Tmall has newly acquired 226 million MAU(monthly active users) in the past two years. The majority of them are from the 2nd, 3rd, 4th tier cities, thanks to Tmall's recent business strategy change to embrace the customers outside the first tier megacities. Most of them were successfully converted to contributors in this year's Singles' Day shopping festival.

However, what will the top E-commerce companies do after this shopping bonanza? More subsidies? More cooperation with local social network giants? Or some innovative paths with help from technologies to unlock new growth yet unforeseen by others?