ALIBABA GROUP HOLDING LTD (NYSE:BABA)
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1 Month : From Oct 2018 to Nov 2018
By Shan Li
BEIJING -- A slowing Chinese economy, weakening consumer sentiment and a trade fight with the U.S. aren't likely to spoil Singles Day for Alibaba Group Holding Ltd., which will try out a few new tricks to ensure the 10th edition of its shopping extravaganza sets a sales record.
The event serves as a reminder to consumer products companies and investors of Alibaba's power to move merchandise. Last year, it booked a record $25.3 billion in sales for Singles Day -- surpassing the $19.6 billion that Americans dropped online last year in the five days from Thanksgiving through Cyber Monday.
But when the megasale kicks off at 12 a.m. on Nov. 11, with bargain-basement prices on Burberry scarfs, New Balance shoes and even Buicks, many consumers will be dialing things back.
A new survey from consulting firm Oliver Wyman shows that 38% of Chinese millennials -- a core group of shoppers for Alibaba -- plan to spend less this year. Overall, the survey said, 30% of shoppers plan to spend less this year.
Zheng Miao, 48, of Chengdu said she typically spends the equivalent of hundreds of dollars on Singles Day every year, favoring clothes and household goods. This year, there is just one thing on her list: a comforter.
"I just want to be careful about buying things I don't need," said Ms. Zheng, who owns a hot pot restaurant. "I've bought lots of stuff during 'Double Eleven' that I never used. They just sat in a pile at home unopened."
Despite such austere sentiments, Alibaba faces annual pressure to top the prior year's record, said business consultant and author Duncan Clark.
"It's almost like Frankenstein," Mr. Clark said. Alibaba "didn't fully anticipate what the whole thing would become."
Singles Day began as a tongue-in-cheek holiday that celebrated China's young lonely hearts. Its Chinese name -- "Single Sticks Holiday" -- is derived from its date: Nov. 11, or 11-11.
Alibaba Chief Executive Daniel Zhang, who is credited with the idea of turning it into a shopping opportunity, has said Singles Day was originally conceived as a way to "make a small business grow quicker."
"Ahead of that first 11-11 for us, it was just about survival," he said in an interview, published by Alibaba.
A decade later, online shopping has become so integrated into daily life that people need less of an incentive to buy online. At a recent event in Beijing, Mr. Zhang said the shopping event will have to evolve.
"In the next five or 10 years, there will be new forms of internet, there will be new ways of living, there will be new services," said Mr. Zhang. "This is our 'Double Eleven' -- that we can learn from the past 10 years, but also face the future."
To make sure it beats last year's sales record, Alibaba is trying out a few new tricks.
For the first time, Alibaba's supermarket chain, Hema, and Yelp-like online platform Koubei will run Singles Day promotions. Its food-delivery service, Ele.me, will also offer discounts, including selling limited quantities of Starbucks cold brew coffee for 1 yuan, or about 14 cents.
About 200,000 stores across China will have QR codes that shoppers can scan to find deals online, double the amount deployed last year.
In another first, Lazada Group, an e-commerce subsidiary based in Singapore, will be aggressively pushing Singles Day with its first 11-11 shopping promotion in six Southeast Asian countries, including the Philippines and Malaysia.
Deals remain the heart of the promotion. Discounts on about 500,000 items were rolled out during a pre-sale period that kicked off on Oct. 20. Buick has already gotten orders for 7,000 cars and hotel chains like Hilton Worldwide Holdings Inc. and Marriott International Inc. have received advanced bookings for 350,000 nights, Alibaba said Thursday.
Other goods available on its Tmall shopping platform: a Whirlpool refrigerator and washing machine set discounted by more than 40% to the equivalent of about $3,160 and a hospital-style bed selling for a third of its regular price.
Beyond discounts, Singles Day is also a star-studded spectacle. Alibaba is throwing a Saturday night gala in Shanghai that will be broadcast live on two television channels. Thousands of attendees will watch Cirque du Soleil perform and celebrities including Australian model Miranda Kerr and singer Coco Lee will be in attendance.
in Beijing contributed to this article.
Write to Shan Li at email@example.com
(END) Dow Jones Newswires
November 09, 2018 11:45 ET (16:45 GMT)
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