- Alibaba (BABA.NYSE) has posted a new single-day sales record of RMB 168.2 billion on November 11, the Chinese version of “Black Friday“, as reported by Caijing.
- Also JD.COM (JD.NASDAQ) posted sales of RMB 127 billion for the day.
Why It Matters:
- Alibaba launched the November 11 Sales Day nine years ago on its e-commerce platforms as a means of offering huge discounts in order to promote sales. Each year the sales record has increased significantly and the sales number has been monitored closely by investors in order to gauge the performance of Alibaba and Chinese e-commerce companies.
- However, Alibaba’s reported daily sales number might exaggerate the level of consumers’ real consumption. JD.com suggests that Alibaba had locked-in many sales by taking pre-orders as early as 22 days ahead of November 11 which in turn forced consumers to delay purchases until the day. Selerity has also reported that some sellers using Alibaba platforms had created fake sales in order to improve their rankings on Alibaba platforms to get better deals in advertising and ranking agreements.
- Unlike Black Friday in the U.S., most of the the sales on China’s November 11 are final and non-returnable. Therefore, impulse spending on the part of Chinese consumers is fully translated into Alibaba’s and JD.com’s profits.