Alibaba’s annual ‘Double 11’ promotional period centered around November 11 is the undisputed king of e-commerce shopping festivals. Since its introduction in 2009, the Chinese tech giant’s commercial bonanza has superseded various other e-commerce holidays in countries around the world by a country mile, with last year’s haul recording a gross merchandise value of nearly $75 billion – larger than the U.S.’ Black Friday and Cyber Monday shopping periods put together.
While the festival stands as the largest of its kind in terms of revenue, most of its success can be attributed to the size and fervor of Chinese domestic e-commerce consumers. Alibaba is aiming to change that.
Double 11 stems from the unofficial Chinese holiday known as ‘Singles Day’ (光棍节 Guānggùnjié), a light-hearted time to celebrate people who are not in a relationship. In Chinese, guanggun translates to ‘bare branch’, and is often used as slang to describe men who have not added to the family tree.
In the early 1990s, students at Nanjing University became the first known to observe this concept on November 11, due to the written date’s resemblance to two pairs of bare branches.
Chinese internet technology giant Alibaba, founded by billionaire entrepreneur Jack Ma in 1999, has since had huge success in capitalizing on this festive spirit, using it as an opportunity to offer tempting discounts on their digital shopping platforms. During the days and even weeks leading up to the shopping festival, Alibaba’s various e-commerce sites – including business-to-consumer platform Tmall and consumer-to-consumer platform Taobao – offer various bargains to their eager customers.
Last year’s Double 11 haul set a record for Alibaba. With millions of consumers eager to blow off cash following the country’s recovery from the COVID-19 outbreak lockdowns, which resulted in massive levels of pent-up demand, the company transacted a gross merchandise value of 498.2 billion yuan ($77.9 billion) between November 1 and 11.
The web traffic generated from such a shopping frenzy is remarkable. Alibaba recorded a highest-ever peak rate of 583,000 transactions per second at 0:00:26 on November 11, 2020. As the firm claimed, “Alibaba Cloud has once again withstood the world’s largest traffic peak.”
With this level of consumer interest, it’s not surprising that competing firms have sought to get in on the action. Rival domestic e-commerce platform JD.com also set a firm record in 2020, with total sales in the period totaling 271.5 billion yuan.
In 2011, Alibaba applied to the country’s trademark authorities for the exclusive rights to use 双十一 (shuāng shíyī, or ‘double eleven’) in its domestic marketing of the holiday, gaining approval from the body the following year.
Three years later, Alibaba used the trademark to engage in a legal spat with JD.com in an attempt to secure its preeminence over the growing shopping festival, during a period of cutthroat competition in the Chinese e-commerce market. However, comments from then-CEO of Alibaba Jonathan Lu in 2014 seemed to suggest a truce: “ ‘Double Eleven’ is and always will be an open festival, belonging to all hard-working participants together.”
This year’s Double 11 may also set records, with a highest-ever 290,000 brands registered to participate. In addition, Alibaba has assigned the themes of sustainability and inclusivity to the 2021 edition of the festival, claiming it has taken steps to reduce its carbon footprint and unveiling a ‘senior mode’ on the Taobao app to help older consumers purchase items.
Alibaba Bets Big on European Market
As part of the firm’s ongoing efforts to expand internationally, largely through AliExpress, the international version of Taobao, Europe has received increasing levels of attention from Alibaba over recent years. Whereas the North American market has largely been captured by local e-commerce giants like Amazon and eBay, the European landscape remains far more competitive. The Double 11 holiday period – mainly distinct to Chinese e-commerce firms – offers Alibaba a key opportunity to get a leg up on its opponents.
Vital to Alibaba’s success in faraway markets like Europe is its complex logistics infrastructure arm called Cainiao, which this week unveiled a new hub at the Liege Airport in Belgium. The facility integrates digital technology in a bid to streamline processing and is comprised of a 12,000-square-meter air cargo station and an 18,000-square-meter parcel sorting center.
David Bu, General Manager of the European Region for Cainiao, said in comments last month to supply chain media outlet Post and Parcel: “Together with our local partners and suppliers, we strive to deliver superior service and operations, and will continue to contribute to the growth of Europe’s logistics system.”
What’s not clear, however, is how familiar the average European consumer is with the Double Eleven shopping festival – if they even know what it is.
While AliExpress is one of the fastest-growing e-commerce platforms in the continent, its market share in the western European e-commerce sector sat at just 2.9% in 2020, according to data from Euromonitor. The same study showed that U.S. firm Amazon’s share in the region was 19.3%.
In eastern Europe, Alibaba is more competitive. According to the same study, the firm took the top place in 2019, before slipping to third place behind Polish platform Allegro and Russian platform Wildberries in 2020, as the effects of the COVID-19 pandemic impacted the e-commerce industry.
Li Dawei, who leads AliExpress Supply Chain, told CNBC recently that the three core countries the firm is focusing on for its international expansion are Spain, Russia and Brazil. Visiting the local AliExpress homepage in each of these countries currently displays prominent ’11.11’ marketing to encourage shoppers to take advantage of the deals on offer during the festival.
One important method that Cainiao is currently pursuing to shore up its logistics capacity ahead of this year’s global Double Eleven period is to install roughly 5,000 package lockers, which make it possible to deliver a group of packages quickly to entire communities in a secure manner.
Increasing air freight represents another key strategy for Cainiao to cope with the higher delivery rate between China and Europe, which it expects to grow by 30% by the end of this year, citing “booming demand” among local consumers for Chinese fashion goods, home appliances and electronics.
This year’s Double Eleven sales, underpinned by China’s hefty domestic consumer base, could see Alibaba set even higher records, but it remains to be seen whether the firm’s lofty ambitions for the festival in the European market will bear fruit.