November 11 is a day of sombre reflection across much of the West, with Commonwealth nations observing Remembrance Day while Veterans’ Day is an official public holiday in the US.
It’s a world away in China, though, where it’s Singles’ Day – an idea begun in 1993 by four lonely Chinese students who reckoned the 11th day of the 11th month (note the four single ‘one’ digits) would make a great day to celebrate being unattached.
It became a sort of anti-Valentine event, where those without partners bought themselves gifts and – as you do in China – enjoyed lots of karaoke.
Enter e-commerce giant Alibaba – owned by Jack Ma, up until February China’s richest man – which swooped on the event to offer discounts on its goods.
November 11 in China has since morphed into an orgy of online spending. More and more firms have jumped on the bandwagon to make it the world’s biggest day of internet shopping.
On Wednesday, Singles’ Day smashed sales records by midday. Shoppers were out in droves, racking up $5 billion of sales in the first 90 minutes on Alibaba, roughly double last year’s haul in the same period, reports the Financial Times. Alibaba also netted nearly twice the entire take of last year’s Cyber Monday – the day the US, fresh from feasting on Thanksgiving turkey, feasts on shopping deals – itself a record.
Alibaba’s sales on the day rose 60% from last year to $14.3 billion. Another online retailer, JD.com, reported record transactions of more than 20 million.
But despite beating records, Alibaba shares dipped nearly 2%. Why weren’t investors impressed?
It’s because those concerns about China’s slowing growth still won’t go away – a point that Jack Ma himself highlighted on Thursday. Although he believes the government’s 7% GDP target for this year is achievable, he told CNBC: “I believe the next five to 15 months will be a tough time for China for various reasons, of course, one, the anti-corruption will definitely have some effect.”
Jasper Lawler, a market analyst at CMC Markets, adds that Alibaba continues to be used as a US proxy for Chinese economic health “so shares dropped alongside industrial production figures”.
Another batch of mixed data from China on Wednesday did little to allay concerns that the world’s second largest economy is slowing.
“Industrial production growth matches its weakest since 2008, although retail sales improved,” wrote Mike van Dulken and Augustin Eden at Accendo Markets. Coupled with Alibaba’s new Singles’ Day record “we have further evidence of the nation’s shift from export-led to consumer economy”.
Michael Hewson, chief market analyst at CMC Markets UK, remains concerned about retail sales in China.
“The latest October retail sales numbers did improve to 11%, from 10.9% in September, which is still below the levels we were seeing at the end of last year of 11.8%,” he writes.
“Furthermore this modest improvement doesn’t really chime with the stories circulating out of China at the beginning of October during Golden Week about surging sales in the restaurant, cinema and travel sales sector.
“According to some reports, turnover at restaurants and retailers totalled more than one trillion yuan during the seven days, which equates to over $156 billion, so for retail sales to only improve 0.1% does seem rather at odds with the early October optimism.”
Alibaba shares closed on the New York Stock Exchange at $79.85 on Wednesday, down more than 20% in the year to date. However, they’ve recovered from a yearly low on September 28 of $57.39 to trade currently at $80.00.
