China’s biggest e-commerce company Alibaba has hit a new record in online sales with the net value of $14.33 billion on the annual Singles Day, the world’s biggest online shopping day, with shoppers indulging on a range of products.
Alibaba, which amounts for 8% of China’s total retail sales volume, has declared its total sales of yesterday exceeded more than $10 billion transactions it made in the previous year. This year’s sales are considered be 60% rise in sales when compared with the previous year. Apart from Alibaba, many other online retail outlets like JD.com, Suning Commerce Group reported large sales on the Singles’ Day.
It is at this time of the year, Chinese buy all the home need goods at the cheapest possible rates. In matter of 11 hours from the start of the day, more than 37,000 health products were ordered from USA said Sun Weimin, VC of Suning. Jack Ma, executive chairman of Alibaba said the Singles Day shows only a small part of actual potential of the demand in China. Ma said, “China has a middle-class population of 300 million. We believe there will be 500 million within the next 15 years, which would bring huge demand for high-qulaity products, therefore boosting economic growth.”
However, with a huge sales turnover this at Alibaba, markets and the commentators were not impressed because the Singles’ Day sales failed to fuel its share price with shares closing down at 2% in New York. The stock was up initially until Jack Ma made some cautionary comments about growth expectations in China and the impact on Alibaba,” explained Victor Anthony, managing director and senior internet media analyst at Axiom Capital Management.
Other experts say that GMV – gross merchandise volume should not be considered as it does not give a complete picture. The critics raised because the reports showed the company’s GMV was 60% more than 2014’s. It is said GMV does not take in customer returns, running out of stock or cancelling of order etc which mean the ultimate final numbers would be lower. “With a sales holiday like this, because there is a lot of impulse purchasing and a lot of gifting, there is no guarantee that people are going to end up liking the product,” said China Market Research’s Ben Cavender.
Despite all this, there were others like Hany Nada, GGV Capital co-founder and managing partner said, “They had a good day on Singles’ Day and I think many investors felt it was a good time to exit the stock,” which is why the shares went down.