Alibaba smashes its sales record on Singles’ Day, but growth is slowing

Update: Alibaba closed the day with RMB 120.7 billion ($17.79 billion) in GMV.

It’s November 11 — 11/11, or Singles’ Day — which is China’s biggest shopping day. A day for records. A big promotion day for Alibaba, which surpassed its sales total from last year’s event hours before it closed, despite overall growth slowing.

This year, Alibaba marked Single’s Day — the planet biggest online shopping event — with a splashy four-hour show in Shenzhen which include appearances from Hollywood actress Scarlett Johansson, ex-England footballer David Beckham, retired NBA player Kobe Bryant, and live music from OneRepublic. Company founder Jack Ma even presented a magic trick on stage.

On the business side of things, GMV, the metric to measure the total value of merchandise sold across Alibaba’s online stores, hit $14.3 billion last year. That figure was beaten in Chinese Yuan before 3:30 pm, while the U.S. Dollar metric was beaten before 8:00 pm when GMV reached $14.69 billion, or RMB 100 million. (You can put that down to changing overseas currency rates.)

This is a huge sale.

For some perspective: Black Friday, the U.S. shopping event around Thanksgiving, reached $4.5 billion in GMV last year, while Cyber Monday — another top U.S. shopping date — crossed a record $3 billion in 2015. Alibaba claimed its GMV topped $1 billion just 4 minutes and 54 seconds into the sale, and growth over the last few years has certainly been remarkable.

“Back in 2013, RMB 35 billion was our one-day GMV. Now we can achieve it in one hour,” CEO Daniel Zhang, who invented the Single’s Day concept in 2009 when he led Alibaba’s T-Mall business, said in a statement.

But there’s more to it.

Alibaba has come under pressure from regulators over the way it measures Single’s Day, with the SEC launching an investigation into “accounting practices” this summer. Alibaba doesn’t take a cut of sales from its merchants — the GMV figure — instead charging for advertising. That makes the GMV figures, while impressive, somewhat of a distraction from the actual revenue it is pulling in. That’s important because there has been much chatter about slowing economic conditions — which haven’t affected Alibaba yet — while the company is putting emphasis on new markets like India and Southeast Asia to offset concerns around growth potential in China.

Total sales reached $17.79 billion by the end of the day. Single’s Day GMV jumped 60 percent from RMB 57.1 billion (then $9.3 billion) to RMB 91.2 billion (then $14.3 billion) between 2014 and 2015, and this year’s figure represented a lower 32 percent increase on last year. However, the figures don’t include returns which could be as high as 30 percent, analysts told the New York Times.

What’s particularly interesting about the sale, is the high volume of money being spent on mobile. As of 1pm China time, mobile represented 84 percent of all sales. That rate has slowly decreased as the day as gone on, probably because of a surge in people using their smartphones when the sale opened at midnight, but it is on course to be significantly higher than 11/11 201, when mobile was 69 percent of GMV. In the U.S., mobile is typically below 35 percent of sales on shopping bonanza dates.

Alibaba rolled out support for VR in the week leading up to 11/11 to allow users to shop “virtually” in department stores like Macy’s from the comfort of wherever the are. The concept is still new, but no doubt it will become a more prevalent and important medium for Alibaba as virtual reality and augmented reality gain a foothold among increasing numbers of consumers. It could also help Alibaba broaden its reach into international markets.

On that note, Alibaba said that over 14,000 “international brands” are taking part in is sale, and that they account for around one-third of sales. Apple, Adidas, Nike, Siemens and Uniqlo are among the top sellers, it said. But this is Alibaba, and Chinese brands are also cashing in on the company’s increased globalization and international reach, with consumers in some 207 countries buying items in the Single’s Day sale.

“The demand for international products continues to be very strong, the value proposition for Chinese consumers for international products continues to be enormous,” Alibaba Group President Michael Evans said.

Article updated with end-of-day figures and related year-on-year growth numbers