 |
| Source: Alibaba Group. After the full 24 hours, 11.11 had garnered RMB120.7 billion in GMV. |
Alibaba Group announced that RMB120.7 billion (US$17.8 billion) in gross merchandise volume* (GMV) was settled through Alipay on Alibaba's China and international retail marketplaces on November 11, 2016. This is an increase of 32% compared to 2015**. Total mobile GMV settled through Alipay was RMB99 billion (US$14.6 billion), accounting for 82% of total GMV.
"This year’s 11.11 is a preview of the future of retail, where entertainment, commerce and interactive engagement intersect seamlessly,” said Daniel Zhang, CEO, Alibaba Group. “From the kickoff of warmup activities to last night’s countdown gala and all the way through the 24-hour global shopping festival itself, we’ve seen unprecedented engagement between consumers and merchants. 11.11 showcased how online and offline retail will be reinvented to offer brand new shopping experiences to our hundreds of millions of mobile, digitally savvy active users.”
Key highlights from the 2016 11.11 Global Shopping Festival Alibaba Cloud processed 175,000 orders per second at the peak
Alipay processed more than 1 billion payment transactions in total, and processed 120,000 transactions per second at peak
The Cainiao Network processed more than 657 million delivery orders placed on Alibaba’s China and international retail marketplaces
This year was Alibaba’s most global 11.11 shopping festival since the inception of the event in 2009, offering Chinese consumers access to brands and products from businesses of all sizes around the world. Highlights from the 2016 Global Shopping Festival include:
Cross-border transactions were completed with 235 countries and regions
Over a third (37%) of total buyers purchased from international brands or merchants Top countries selling to China by GMV included: Japan, US, South Korea, Australia, and Germany
Top Japanese brands by GMV included several tech brands: Panasonic, Sharp, and Sony
Alibaba further said that it has successfully leveraged technologies in artificial intelligence, machine learning and cloud computing during the 2016 11.11 Global Shopping Festival, which supported Alibaba’s online marketplaces and facilitated 175,000 orders per second during unpredictable peak traffic spikes, without incident.
“Alibaba Group has advanced from an e-commerce company to a global technology leader, enabling us to power the future of retail through the latest technologies in big data, cloud computing, artificial intelligence, augmented reality, and virtual reality (VR). The 2016 11.11 Global Online Shopping Festival was a showcase for our ground-breaking innovations such as an interactive virtual reality shopping experience, and used advanced machine learning algorithms to create personalised customer experiences,” said Jeff Zhang, CTO, Alibaba Group.
Backed by what it says is the world’s largest hybrid cloud architecture with scalable computing power, real-time data processing and analytic capabilities, Alibaba Group facilitated an unprecedented volume of transactions during the 24-hour global event. Apsara, the super computational engine developed by Alibaba Cloud, the cloud computing arm of Alibaba Group, ensured that networks and systems were scaled to enable unprecedented volumes and efficiently matched buyers and sellers worldwide.
Other advanced technology capabilities supporting the end-to-end shopping experience included: a global content delivery network (CDN) deployed for the live streaming of the 11.11 Global Shopping Festival gala; OceanBase, which ensured transaction completion on AliPay with zero order-dropping and zero faults, as well as Alibaba’s security measures and anti-DDoS** capability.
Alibaba Cloud’s technologies were not only the digital foundation for the world’s largest online shopping event, but also demonstrated the group’s vision of servicing all sectors with data technologies in order to enable them to participate in the new global economy.
“Alibaba Cloud’s technologies lay the infrastructure cornerstone for commerce in the future, enabling marketplaces, payments, logistics, and a host of technology capabilities including computing, big data and artificial intelligence, to work together seamlessly. We believe that cloud computing and data technologies are the twin engines powering the future global economy and will drive transformation across all industries. This year’s 11.11 Global Shopping Festival is testimony in itself that our technologies are ready to advance a new economic environment and help SMEs and businesses of all sizes, across all sectors, to expand on a global scale,” said Yunfei He, Senior Product Manager, Alibaba Cloud.
Ahead of 11.11 research firm IDC observed that key e-tailers such as JD.com, Tmall and Suning actually begin promotions from 1 November, and presales activities begin earlier still. From October 21 to 31, e-tailers began 'warm-up' promotions for various products. Tmall focused on selling technology products between October 24 to 26, with limited quantities of products sold at certain times of the day at a very low price. It also provided discounts and rebates during this period. From November 1 to 10, Tmall ran vendor and brand days as well as product category days. Cash and vouchers were used to attract consumers to purchase more items.
The ecosystem was prepped for high demand before 11.11. IDC points out that Alibaba and Suning have formed a joint venture known as “Mao Ning” in October to manage the supply chain for Tmall and Suning (苏宁), a retailer known for selling appliances. "Alibaba’s strength is the wide reach that its online platform (Tmall) has, while Suning’s strength is in its wide coverage of offline retail shops and management of supply chain/logistics," the firm stated.
"During the Singles’ Day shopping season, Suning will focus more on handling the supply chain logistics, while Alibaba will focus more on marketing online to reach out to a wider base of consumers. Prior to this, Suning already has an online store on Tmall’s site and this will further help to strengthen the working relationship between these two companies. With these two companies joining forces, they will be able to leverage each other’s strengths to compete more aggressively with JD.com."
To strengthen its offline retail channels and better position itself as an international brand, JD.com also acquired e-tailer Yihaodian (1号店) from Walmart in June. "It will be able to widen its source of imported products using Walmart’s supply chain and strengthen its positioning for groceries when compared to Tmall during the Singles’ Day sale. Starting from October, Walmart’s flagship store can also be found on JD.com," IDC stated.
When it comes to smart connected devices competition is so intense that most device vendors had formed a marketing team just for this sale, and camped in the offices of Tmall and JD.com on 10 and 11 November to make quick changes to their strategies to compete with other vendors, IDC said. There is also a dynamic where certain brands forge closer relationships with chosen e-tailers, such as Xiaomi and Canon working more closely with Tmall, which allow them to get better advertisement slots on the Tmall website, IDC added. Lenovo, HP and Epson have a closer relationship with JD.com, and use flash sales and discounts to drive up their sales.
The company named smartphones, notebooks, monitors, 2-in-1s, drones, smart robots and wearables to be popular, and said at the end of October that vendors will focus more on their technological capabilities in their marketing messages.
IDC's highlights of vendors’ strategies for Singles’ Day in 2016:
VR
IDC highlights that Alibaba introduced a VR shopping programme known as buy+ this year, under which a user with a cardboard viewer can be virtually transported and enter various retail shops overseas in the US, Japan or Europe to have a 360-degree view of the shops there. "The user can easily focus on an item in the shop, have a 3D view of it, and the price and a short description of the item will pop up. The user will also be able to easily purchase the item in virtual reality, which is a rather interesting way of providing consumers with a new shopping experience," IDC noted.
Live streaming by celebrities
Vendors used more interactive methods to reach out to consumers. Celebrity endorsers of various brands live-streamed to reach out to consumers and to market brands. Some vendors' CEOs also did the same in front of the camera.
Pre-orders of new products
VR
IDC highlights that Alibaba introduced a VR shopping programme known as buy+ this year, under which a user with a cardboard viewer can be virtually transported and enter various retail shops overseas in the US, Japan or Europe to have a 360-degree view of the shops there. "The user can easily focus on an item in the shop, have a 3D view of it, and the price and a short description of the item will pop up. The user will also be able to easily purchase the item in virtual reality, which is a rather interesting way of providing consumers with a new shopping experience," IDC noted.
Live streaming by celebrities
Vendors used more interactive methods to reach out to consumers. Celebrity endorsers of various brands live-streamed to reach out to consumers and to market brands. Some vendors' CEOs also did the same in front of the camera.
Pre-orders of new products
Vendors had already started offering pre-orders for some of their items by late October. "This largely serves two purposes. Firstly, it helps vendors to get a gauge of the demand for their products to better manage their inventory. Additionally, this pre-order is only for a limited period of time and consumers may feel pressured to sign up for it to purchase the products. If consumers choose the pre-order option by paying a deposit in advance, they can secure the product at a low price during the sale," IDC noted.
Competition between key vendors
Competition between key vendors
IDC predicted that there would be Singles' Day battles to prove market supremacy across several connected device vendors. In the smartphone market, the direct competition between the LeEco Le Pro Series and Xiaomi's Mi 5 is one such fight. "The demographics of consumers for these two brands are largely similar, and they both focus on the 5<5.5" segment and having a full HD display, with prices in the mainstream US$220<US$300 range. "Both vendors which have a focus on online channels need to use Singles’ Day to prove their position in the market," IDC said.
For gaming PCs, Lenovo has maintained its strong No. 1 position in the gaming PC market in China, but HP’s gaming notebooks have also been on the rise recently, affecting ASUS’ second place in the market, IDC added. "Both vendors have not been able to obtain high market share for the ultra-slim notebook market. To increase their market share, there will be intense competition between these two vendors during the Singles’ Day sale," the company noted.
In the ultra-slim notebook segment, Lenovo’s Xiao Xin Air and Dell’s Ran have been emphasising two key trends in the consumer notebook market, that of being ultra slim and also of featuring a slim border. "Both vendors also hope to target the mid-range to high-end market. It will be interesting to see how they market their ultra-slim products during this sale," IDC said.
Xiaohan Tay, Senior Market Analyst, Client Devices Research, IDC Asia/Pacific said: “With the competition getting heated up, e-tailers are seen using different methods to try to outwit one another and differentiate themselves from each other. Alibaba’s use of livestreaming and VR clearly stands out this year. Although consumers may still prefer to purchase directly from their mobile app given that it is more convenient, VR shopping will definitely pick up in the coming years once the technology matures and consumers are provided with a better user experience that comes with clearer and sharper images.”
With the market maturing, IDC also expects average selling prices (ASPs) for devices during Singles Day to be higher than that of the previous year. “Consumers are seen to have a greater need for better products and we expect them to be willing to pay more for these devices. Additionally, vendors are also marketing a wider variety of products, trying to push more mid- to high-end products and are seen moving away from the low-price competition as seen in the previous years. Other than what we have mentioned above, we expect competition among vendors to be intense this year and it will be interesting to see what other strategies they try to use to stand out from their competitors," Tay added.
(Editor's note: this year I made a purchase on 11.11 at AliExpress for the first time, because the discounts for products on 11.11 were clearly going to be lower than buying on any other day. There was no discernable lag in information displayed or in payment processing. I was able to get a US$2 discount off the overall purchase in exchange for virtual coins accumulated through adding items to my shopping cart in the days before 11.11.)
*Data related to payment transactions and logistic orders are provided by Alipay and Cainiao Network respectively. All GMV, mobile GMV and other figures are unaudited and subject to adjustments. GMV for the 11.11 Global Shopping Festival is the total value of orders settled through Alipay on Alibaba’s China and international retail marketplaces. It is reported on a real-time basis and includes shipping charges paid (where applicable). Transactions related to international brands, defined as brands created outside of mainland China, and user data are limited to Tmall.
**Alibaba Group's operating results disclosed are denominated in RMB; year-over-year comparisons and growth rates are calculated on the basis of RMB amounts and are not affected by foreign exchange rate fluctuations.
***DDoS stands for distributed denial of service. Such attacks can shut down online activities by overwhelming the infrastructure with bogus requests.
For gaming PCs, Lenovo has maintained its strong No. 1 position in the gaming PC market in China, but HP’s gaming notebooks have also been on the rise recently, affecting ASUS’ second place in the market, IDC added. "Both vendors have not been able to obtain high market share for the ultra-slim notebook market. To increase their market share, there will be intense competition between these two vendors during the Singles’ Day sale," the company noted.
In the ultra-slim notebook segment, Lenovo’s Xiao Xin Air and Dell’s Ran have been emphasising two key trends in the consumer notebook market, that of being ultra slim and also of featuring a slim border. "Both vendors also hope to target the mid-range to high-end market. It will be interesting to see how they market their ultra-slim products during this sale," IDC said.
Xiaohan Tay, Senior Market Analyst, Client Devices Research, IDC Asia/Pacific said: “With the competition getting heated up, e-tailers are seen using different methods to try to outwit one another and differentiate themselves from each other. Alibaba’s use of livestreaming and VR clearly stands out this year. Although consumers may still prefer to purchase directly from their mobile app given that it is more convenient, VR shopping will definitely pick up in the coming years once the technology matures and consumers are provided with a better user experience that comes with clearer and sharper images.”
With the market maturing, IDC also expects average selling prices (ASPs) for devices during Singles Day to be higher than that of the previous year. “Consumers are seen to have a greater need for better products and we expect them to be willing to pay more for these devices. Additionally, vendors are also marketing a wider variety of products, trying to push more mid- to high-end products and are seen moving away from the low-price competition as seen in the previous years. Other than what we have mentioned above, we expect competition among vendors to be intense this year and it will be interesting to see what other strategies they try to use to stand out from their competitors," Tay added.
(Editor's note: this year I made a purchase on 11.11 at AliExpress for the first time, because the discounts for products on 11.11 were clearly going to be lower than buying on any other day. There was no discernable lag in information displayed or in payment processing. I was able to get a US$2 discount off the overall purchase in exchange for virtual coins accumulated through adding items to my shopping cart in the days before 11.11.)
*Data related to payment transactions and logistic orders are provided by Alipay and Cainiao Network respectively. All GMV, mobile GMV and other figures are unaudited and subject to adjustments. GMV for the 11.11 Global Shopping Festival is the total value of orders settled through Alipay on Alibaba’s China and international retail marketplaces. It is reported on a real-time basis and includes shipping charges paid (where applicable). Transactions related to international brands, defined as brands created outside of mainland China, and user data are limited to Tmall.
**Alibaba Group's operating results disclosed are denominated in RMB; year-over-year comparisons and growth rates are calculated on the basis of RMB amounts and are not affected by foreign exchange rate fluctuations.
***DDoS stands for distributed denial of service. Such attacks can shut down online activities by overwhelming the infrastructure with bogus requests.
No comments:
Post a Comment