Business
Shopping Olympics
The November 11 shopping festival has become an important window into China's progress
By Li Xiaoyang  ·  2018-11-19  ·   Source: | NO. 47 NOVEMBER 22, 2018
Robots in operation in a smart warehouse of a courier company in Yingdong Development Zone in Fuyang, east China's Anhui Province, on November 9 (XINHUA)

Like numerous others already filling their online shopping carts in the lead-up to the November 11 shopping festival, Wang Yating, an interpreter in west China's Chongqing, pulled an all-nighter to purchase bargains in flash sales. As the first minute of November 11 struck, she quickly clicked her mouse and saw the number of orders to be delivered rise to 32.

Wang spent about 15,000 yuan ($2,155) on Tmall.com, the business-to-consumer marketplace owned by e-commerce giant Alibaba Group, mainly on house decor. "Still, I forgot to add about 1,000 yuan ($144) worth of bargains to my shopping cart. The prices fell and I kind of regret it now," she told Beijing Review.

Similar to Black Friday and Cyber Monday in the United States, November 11, popularly known as Singles' Day in China, has become the largest online shopping day in China. This year, the annual bonanza brought a gross merchandise value (GMV) of 213.5 billion yuan ($30.6 billion) to Tmall.com and Taobao.com, Alibaba's consumer-to-consumer platform. Other online sellers such as Netease Kaola and JD.com also saw their sales volume reach record highs. Apart from searching for clothing and food bargains, consumers also turned to discounted big-ticket products such as smartphones and televisions.

"The November 11 event has turned into a business Olympics," said Alibaba CEO Daniel Zhang, who initiated the event in 2009. "It has become the largest festival for sellers and buyers at home and abroad."

New records

Evolving from a sales promotion campaign of Tmall.com a decade ago, the November 11 shopping festival has become a great event for both Chinese consumers and global sellers, reflecting the development of e-commerce, logistics and other relevant sectors in the country, along with people's upgraded consumption habits in the past decade.

This year, the shopping festival's Chinese GMV ballooned to over 4,000 times its level in 2009. Despite concerns over China's economic growth slowdown and uncertainties generated by the trade tensions with the United States, Chinese consumers still completed over $10 billion worth of purchases in the first two minutes and five seconds of November 11. After only 15 hours, 49 minutes and 39 seconds, Tmall.com's sales volume exceeded the full-day total in 2017.

Now, with a few clicks of the mouse or a smartphone, Chinese consumers can purchase goods produced thousands of miles away or from other countries. "The past decade has not only witnessed the rapid growth of e-commerce in China, as November 11 transforms into an online national shopping event, but also the fact that smartphones have replaced personal computers in people's daily life," said Zhang Yi, CEO of iiMedia Consultation Group.

According to Zhang Yi, the rapid growth of e-commerce in China has been accompanied by the upgrading of consumers' demands from meeting their basic needs to seeking higher-quality products.

Data from Tmall.com and JD.com revealed Chinese consumers' new favorites. According to Tmall.com, electric heaters and humidifiers were the most-purchased domestic appliances on the Internet in 2009, while in 2017 they were replaced by smart robotic cleaners, air purifiers and cordless vacuum cleaners. This year, sales of smart robotic cleaners priced over 2,000 yuan ($288) on JD.com registered a year-on-year increase of 420 percent by 2 p.m. on November 11.

As Chinese consumers pursuing high-quality commodities turn to the global market, cross-border e-commerce brands such as Netease Kaola and Tmall Global have emerged for domestic buyers to access international products online.

"Attracting international brands through e-commerce platforms is effective for China to boost consumer spending at home," said Zhao Ping, an official with the China Council for the Promotion of International Trade.

To complement online operations, many Chinese e-commerce giants are also taking part in New Retail to seamlessly integrate online and offline sales. These include Alibaba's Hema and Suning's brick-and-mortar stores, which sell daily perishables. With increasingly improved ordering systems, consumers can place online orders and pick up the goods at offline stores or choose delivery services that will put the products in their hands within half an hour.

Xing Lipeng, owner of an online shop, checks sales and delivery records at his office in Liaoyuan, northeast China's Jilin Province, on November 11 (XINHUA)

Smart growth

Currently, big data and cloud computing have permeated into the e-commerce industry, generating smart supply chains and logistics.

In the Future Park developed by Cainiao, Alibaba's logistics arm, hundreds of robots able to sort and pack goods assist human workers, greatly improving the efficiency of package delivery. Self-driving trucks have also been put into use by JD.com in Beijing and Xiongan New Area in north China's Hebei Province to deliver packages.

Cainiao data showed that smart logistics systems have enabled Tmall.com to deliver domestic appliances and farming tools by matching rural buyers with local warehouses, shortening the transportation time and achieving more efficient delivery. According to Sun Jian, a senior executive at Cainiao, smart logistics have solved the problem of delivery delays.

China's courier delivery sector has also been shifting toward automated operations as delivery companies such as YTO Express and ZTO Express transform their distribution centers to achieve smarter management.

"Automated distribution centers and smart warehouses are becoming common in the logistics industry," Sun said.

For buyers, technological progress has enabled them to shop online more easily through advanced payment systems. According to relevant data, 60.3 percent of people used touch ID or facial recognition to pay for what they bought on November 11. "Through technological upgrading, we have shortened users' payment time to 1 second," said Hu Xi, CTO of Ant Financial, an online payment service affiliate of Alibaba.

Huge potential

Before November 11, concerns about the shopping festival's success grew because of the slowdown of growth in Chinese consumer spending in the first three quarters of the year. From January to September, the total retail sales of consumer goods increased 9.3 percent, slightly declining from the two-digit growth rate in 2017.

However, the huge online sales volume on November 11 saw another annual increase, suggesting there is more potential to be unleashed in the domestic market, Zhang Li, a research fellow with the Chinese Academy of International Trade and Economic Cooperation, told the 21st Century Business Herald, a business newspaper in China.

More importantly, as e-commerce platforms are providing consumers with a better shopping experience by improving Internet-based technologies and supporting services, consumers have become increasingly accustomed to online shopping.

"Last year it took me almost a month to get a piece of clothing. I almost dropped the idea of shopping online this year," Liu Sisi, a 25-year-old teacher working in Shenzhen, south China's Guangdong Province, told Beijing Review. "But sellers delivered my goods on time and logistics were much faster this year. So, I received my purchases only three days after November 11."

According to Zhang Li, relevant indicators show that November 11 sales will continue to undergo explosive growth. "With appropriate stimulus, the potential of the Chinese consumer market will be further released," he said.

Copyedited by Rebeca Toledo

Comments to lixiaoyang@bjreview.com

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