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What helped Alibaba sales cross $38.3 bn on Singles' Day 2019?

What helped Alibaba sales cross $38.3 bn on Singles
Highlights

Pushing the boundaries of what and where to sell, effective use of pre-order campaigns and leveraging live streaming to drive sales

Hangzhou (China): Pushing the boundaries of what and where to sell, effective use of pre-order campaigns and leveraging live streaming to drive sales are the three key factors that allowed Alibaba to generate a staggering $38.4 billion in sales at this year's Singles' Day shopping event, according to an analysis by market research firm Forrester.

"In addition to selling more product categories, Alibaba expanded 11.11 to new markets, both inside and outside of China," Xiaofeng Wang, Senior Analyst at Forrester, wrote in a blog post.

As online retail growth slows in top-tier cities, Alibaba faces fierce competition from emerging players like Pinduoduo that use budget deals to attract price-sensitive consumers in lower-tier cities.

"This year, Alibaba tried hard to reach and acquire new customers in lower-tier cities, adding a group buying feature and a separate Taobao Deal app. In Tmall Global's 10 markets across Asia Pacific and North America, it also launched aggressive 11.11 promotions such as parcel consolidation, shipping from local warehouses, and local payment options," she said.

Alibaba launched pre-orders on October 21 to ensure that more transactions would occur on Singles' Day.

"Exclusive pre-order offers encouraged consumers to add products to shopping carts 20 days prior to the event, where the transactions would be held until 11.11. To some extent, this compressed 20 days of GMV (gross merchandise value) into 24 hours," Xiaofeng said.

Additional discounts only applied if shoppers paid a non-refundable deposit upfront and agreed to settle the balance on Singles' Day.

"Cancelling a pre-order or failing to pay the balance on time would cause shoppers to forfeit their deposit, and returns and refunds were not possible until November 12. These policies ensured that retailers would generate maximum GMV on November 11 despite the likelihood that they would have lots of returns and refunds in subsequent days," she said.

Leveraging live streaming to drive sales also helped Alibaba as over 17,000 brands participated in live streaming on November 11 this year.

"Alibaba is now testing AI-powered real-time translation for live streaming and plans to take streaming commerce global," Xiaofeng said.

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