Friday, 14 December, 2018

Lazada experienced explosive growth in Southeast Asian sales on Singles Day

Reuters Reuters
Nellie Chapman | 13 November, 2017, 18:13

On Saturday, Chinese shoppers celebrated their romantic independence by spending more than $25.3 billion on Alibaba's e-commerce site during "Singles Day"., the country's largest consumer electronics retailer and second-largest e-commerce firm behind Alibaba, booked $19 billion in total sales for Singles' Day, which will be reflected in its fourth-quarter earnings. The event is celebrated on November 11 in China and is the biggest commercial day of the year, with sales reaching at least 225 countries worldwide.

For example, Amazon has a market cap of $427 billion, whereas Alibaba is at a "mere" $265 billion, but they account for almost the same amount of total retail in the USA and China, respectively (over $4,800 billion each).

In the end, Singles Day - now dubbed 11/11 - was only about 10% of total GMV in the last fiscal quarter of 2016, Raymond James analysts note. At one point, the company was processing 325,000 orders a second.

Consumer spending in China accounted for 40 percent of the GDP, compared with nearly 70 percent for the U.S. Reaching that level would translate to annual spending of 700 billion to 800 billion dollars, according to Tsai's projections.

The jump represents the continuing dominance of the Alipay platform in China, and demonstrates that Chinese consumers "have now fully embraced the integration of online and offline retail", Daniel Zhang, CEO for Alibaba, said in the press release. The company also sold 100,000 microwave ovens in sixty minutes.

It's early days in Alibaba's grand retail experiment, but if it works, it could deepen a lead over Jeff Bezos' Inc in the fragmented world of physical retailing. "The dollar figure was up more steeply due to the strength of the yuan against the greenback this year". It oversees a coterie of more than a dozen shipping partners, orchestrating deliveries carried out by millions of people across more than 600 cities.

Incidentally, Lazada is 83%-owned by Alibaba, following a $1 billion deal announced in June to up its stake from 51%.