China’s Alibaba Group Holding Ltd (NYSE:BABA) smashed all the previous sales records for its Singles’ Day shopping event. Alibaba founder and CEO Jack Ma said that the company received a whopping $9.34 billion during the 24-hour period. It reflects the enormous consumer demand in China despite a slowing economy. The Singles’ Day transaction was way above last year’s figure of $5.8 billion. Analysts were expecting orders worth $8.1 billion.
Alibaba received 278 million orders
Of course, some percentage of orders will likely be returned or cancelled as the shopping frenzy calms. Consumers placed 278 million orders, almost double the last year’s figure. Ma said he was too busy to shop, but his family was among the eager participants. It was the first time the Singles’ Day promotional event had gone global. According to UBS Securities analyst Erica Poon Werkun, shoppers from 175 countries made purchases.
Mobile devices accounted for 42.6% of the gross merchandise value (GMV), compared to just 15% last year. During the first hour of the event, Tmall recorded $2 billion of GMV, an 82% from last year. Alibaba launched a new initiative called TianMaoBao for Singles’ Day 2014. It lets users deposit more funds with Alipay ahead of the shopping event.
In an interview with CNBC, Jack Ma said he plans to fully bring the Singles’ Day shopping to consumers worldwide by 2019. He added that he wanted to take the company’s financial services platform Alipay public in the near future. During Tuesday’s shopping event, millions of users processed payments through Alipay. At its peak, the platform processed more than 2.85 million payments per minute.
Alibaba may join hands with PayPal
Jack Ma noted that Alibaba could partner with Apple Inc. (NASDAQ:AAPL) for a payments system. The two companies have held talks and they both seem to be interested in the partnership, said Ma. There have also been speculations around the Chinese company’s partnership with PayPal. UBS Securities has a Buy rating on the stock with $125 price target.
Singles’ Day is the Chinese equivalent of Cyber Monday. The event gets its name from Nov.11, which has four singles (11/11). The online shopping event has grown from just $7 million in 2009 to $9.34 billion for Alibaba.
Alibaba shares fell 3.16% to $115.39 at 12:51 PM EST on Tuesday.