Happy Singles Day – Apple’s potential slice of The Biggest Shopping Day on Earth It is easy to anticipate that the busiest shopping day of the year is quickly approaching, but in fact it has
already passed. November 11 was Singles Day, celebrated in China and by Chinese people worldwide, in which single people hold parties, give gifts, and splurge on themselves. The date is made symbolic, as in “four ones,” representing four single people getting together for a dinner.
Although Singles Day has existed since the early 1990’s, it has grown to enormous commercial prominence in recent years due to online ecommerce, and with global behemoth Alibaba now leading the social media/ecommerce herd, the numbers are becoming truly historic.
According to Wired.com, “Alibaba revealed this year’s Singles’ Day haul: 57.1 billion yuan, or $9.34 billion. The company also announced that it had shipped 278 million orders, with close to half—43 percent—placed from mobile devices.” This makes the U.S. online Black Friday numbers ($5.29 billion in 2013 for all online companies) pale by comparison. Contributing to the success of this year’s Singles Day haul was the active participation of many internationally recognized brands, including Calvin Klein, Costco, and American Eagle.
Singles Day puts the fast-growing Chinese consumer market into the world’s spotlight. When Alibaba went public in September 2014, the company immediately became bigger than Facebook, Amazon, IBM,and Intel. It is now setting its sights more squarely on how consumers will pay for all the goods they buy.
In an interview with the Wall Street Journal, Alibaba Executive Vice Chairman Joseph Tsai discussed his company’s discussions with Apple, in which it would play a central, but not exclusive role in processing online purchases through its Apple Pay service. Due to regulatory requirements and restrictions, Apple would team up with Alibaba’s own Alipay electronic payment system to complete the financial circuit.
With 300 million active shoppers in China, the stakes are very high for companies such as Apple, as well as retailers such as Costco to become part of a new and very large frontier of commerce. More and more Chinese people are becoming affluent enough and connected enough to want to buy, and Alibaba is ready to make this happen. As Mr. Tsai points out, “I think we [Alibaba] are very well positioned because e-commerce penetration in China is still very low. We define our addressable market as total consumption in China, a $3.4 trillion economy. And there’s only 9% penetration of e-commerce into that. So there’s a lot of room to grow, just in terms of growing the penetration. We’ve got 300 million active shoppers on our platform, but that’s only half of China’s Internet population, and only a quarter of the total population. We are fortunate to have that macroeconomic tailwind behind us. And the rest is execution.”
By Steve Prentice
