On China’s Singles’ Day, akin to the U.S.’s Cyber Monday, Alibaba made of $9.3 billion in sales in 278 million orders. Not only is that an astronomical number for a single company in a 24 hour time period, but it also means that potentially one quarter of China’s population made a purchase from Alibaba that day. Even more astounding is the fact that 43% of those orders were made on mobile devices.
As the Executive Vice Chairman of the Alibaba Group stated, “You’re seeing the unleashing of the consumption power of the Chinese consumer.” And we really are seeing that consumer power combined with the power of the internet and mobile devices to give consumer access to goods and markets. Real Chinese incomes are rising and with that rise comes a rise in disposable income. As consumption increases, so does the Gross Domestic Product of the country, incentive for producers to expand, and incentives for investors to send funds to Chinese firms producing and supplying consumer goods. China will soon be not only the world’s biggest economy, but also the world’s biggest consumer. With that fact will come the desire for imported goods, raising exports from other nations that trade with China. Thus, Chinese growth is not always bad for other nations (such as the U.S.), but can just mean a re-balancing of relative positions.
Sources
http://www.bbc.com/news/business-29999289
Alibaba’s stock continues to soar, as it is now north of $110. When Alibaba’s stock was initially priced at $68, people wondered if it would serve as sound investment decision as Jack Ma publicly stated his primary concern was his employees and customers as opposed to the stock price. Thus far, Yahoo, Blackrock, and several other major stockholders are certainly pleased with the direction Alibaba is heading.
The number that strikes me as the most shocking in this piece is that 43% of the purchases were made on mobile devices. Mobile devices are growing around the world, even in the United States nearly 30% of online sales for Black Friday were made on phones or tablets. As is more common in developing countries, phones may be the primary computer for many of these consumers. It shows that China is a great market for growth in the mobile industry as that seems to be central to how many people complete daily tasks.
The US has been a laggard in mobile devices. Some 15 years ago retailers in Japan were already developing cell-phone-specific shopping sites, eg, with graphics optimized for a small screen. Europe is surely similar. We’re the oddity.
The usage of cell phone-specific shopping sites puzzles me. Do consumers in Asian and European markets not utilize laptops and notebooks at the same level as in the States?