China's Singles' Day smashes retail records with $33 billion in 24 hours

Singles' Day — Guanggun Jie, literally "single sticks holiday" — reportedly originated in Chinese universities in the 1990s as a celebration of being single.

The date November 11 was chosen because it consists of four ones: 11/11.

After Singles' Day became widespread in China it became a retail event heavily promoted by online marketplace Alibaba.com, which trademarked the term "Double 11" in 2012 and threatened legal action against media outlets that accepted advertising from competitors using the term.

Although many retailers take advantage of the day and advertise discounts, it is still widely associated with Alibaba, which does not operate as a retailer itself but provides a platform for other companies to establish online stores.

The 2017 event began soon after a star-studded event in Shanghai late on Friday, when celebrities including Nicole Kidman, who managed a few words of Mandarin, and singer Pharrell Williams joined Chinese celebrities and Alibaba chairman Jack Ma.

As midnight hit, a deluge of pre-orders helped drive $1 billion of sales on Alibaba's platforms in the first two minutes and $10 billion in just over an hour.

The 2016 event set a record for Alibaba of 120.7 billion yuan ($23.8 billion), but that total was reached in just 13 hours this year.

In Shanghai Fu Wenyue, 23, said offers this year were smaller but more "personalised" as brands used big data to hone their targets.

Ms Fu spent 4,000 yuan on clothes, cosmetics and kitchen utensils in pre-event sales, and kept shopping on the day.

"In actual fact, I think I spent even more than I did last year," she said.

Although traditionally an online event, Alibaba said it had turned 100,000 physical shops around China into "smart stores" for this year.

Goods perused by people at the stores, but then bought and paid for on Alibaba's platforms, were added towards the sales total.

Alibaba's final figure reached 168.3 billion yuan ($33 billion), 39 per cent higher than the 2016 figure and more than the GDP of Iceland or Cameroon. More than 777 million parcels were posted.

In contrast, ABS records show a seasonally adjusted $25.6 billion was spent in Australia in December 2016.

Records smashed but analysts cautious — or suspicious

Investors closely watch the headline number, though some analysts say the way it is calculated is too opaque.

The US Securities and Exchange Commission launched a probe into Alibaba's accounting practices in 2016, including into its Singles' Day data. That investigation is as yet unresolved.

Last year, the sales number rose by nearly a third at the eighth iteration of the event — though that was slower than the 60 per cent increase logged in 2015.

"In terms of scale, it just dwarfs any other event out there," said Ben Cavender, Shanghai-based principal at China Market Research Group.

"This is a big event for China, for the Chinese economy," Joseph Tsai, Alibaba's co-founder and vice chairman, said.

"On Singles' Day, shopping is a sport, it's entertainment."

Mr Tsai said rising disposable incomes of China's, "over 300 million middle-class consumers" was helping drive the company's online sales — and would continue.

"This powerful group is propelling the consumption of China," he said.

However, many analysts are concerned the pace of growth cannot be sustained in future years.

Mr Cavender said brands were also increasingly making smaller price cuts to avoid "margins getting killed", and were often asking for deposits in advance. In previous years, prices were often halved.

"A lot of the lower hanging fruit has been picked and there's increased competition for a share of consumer spending," said Matthew Crabbe, Asia Pacific research director at Mintel.

The sale did however beat his forecast of 20 per cent growth.