Online sales in China set new record on ‘Singles Day’ yesterday which has now become the world’s biggest shopping event.
Chinese e-commerce giant Alibaba said that sales jumped past $18bn after roughly 13 hours of the shopping festival on Saturday, eclipsing the $17.8bn it managed in the full 24 hours last year. By the end of the day, sales hit a new record of $25.3bn, more than 40 percent higher than sales on Singles Day in 2016.
The rush for online payment was so high that the shoppers spent $1bn in just two minutes, said Alibaba. The surge in online sales is the result of the digital
leap. Efforts taken by the country in the past few years have begun to yield results. The huge success of Singles Day stands on the robust online payment infrastructure created by China, which has enabled creation of online giants such Alibaba, JD.com and others which are playing crucial role in making such festivals a big success.
This mega event gets shoppers around China scouting for bargains and loading up their online shopping carts, while delivery men - and robots - are braced for an estimated 1.5 billion parcels expected over the next six days.
China’s online-shopping boom is likely to continue in coming years, believe analysts. According to a report from Goldman Sachs, released early this year, country’s online market will sustain its momentum and more than double in size over the next several years. Already the world’s largest, China’s online retailing market will grow to $1.7 trillion by 2020 compared with $750bn last year, said Goldman report.
Anticipating the number of Chinese consumers shopping online will surge by an additional 200 million in the next few years from 460 million last year, Goldman analysts have raised their forecast for total online retail sales in 2020 by 15 percent. The report expects online retail growth to grow at 23 percent CAGR (Compound Annual Growth Rate) over 2016-2020, continuing to grow at nearly triple the pace of offline retail. Analysts see big opportunity in expansion of online sales of Fast Moving Consumer Goods (FMCG)–product categories such as groceries, personal care and healthcare, packaged foods and other everyday items typically found in supermarkets.
China’s total online and offline FMCG market is expected to reach $2 trillion by 2020, with online penetration rising from just 5 percent last year to 13 percent. Currently apparel, footwear and accessories make up almost a quarter of all e-commerce sales, with Alibaba the dominant e-tailer.
New technologies are expected to play a role in sustaining this momentum as companies are applying new ideas such as use of live streaming videos, augmented and virtual reality to stimulate shopping interest.
