¥ CHA CHING ¥
This was the exact sound that ran through the ears of Alibaba’s employees on November 11 as Yen signs popped up in their eyes. The reason you ask?
They just sold 1 billion dollars worth of merchandise in two minutes and one second.
Furthermore. They sold around $25.3 billion of merchandise in a span of 24 hours. Sounds too good to be true? Well, tough luck. Because it is.
In their annual bonanza called “Singles’ Day”, the Chinese Amazon; Alibaba racked up a total gross merchandise value (GMV) of 163.8 billion RMB which converts to about $25.3 billion, beating the record that they themselves had set last year by a whopping 39% and pretty much leaving their global competitors in the dust.
At the peak, their systems handled 256,000 transactions per second and in total, they handled around 1.28 billion transactions.
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Interestingly, this began as kind of an anti-Valentine’s Day in 2009, by offering special discounts to the users. But has since blossomed into something along the likes of the Big Billion Day that is offered by Flipkart, here at home.
In comparison, Flipkart’s Big Billion Day saw a sale of around $1.5 billion.Going a bit international, the USA has it’s Black Friday sale which sees massive discounts and massive crowds in offline as well as online marketplaces. But the maximum figure that I was able to find for this sale was around $3 billion.
Now, something which should be noted is the fact that the figures that we are talking about are the values of the goods sold, they do not reflect the revenue that Alibaba made.
The company gets cash in two major ways. It either asks for a commission and ‘store fee’ from brands that are accepted to Tmall ( the consumer arm of Alibaba); TMall doesn’t charge fees from merchants, it instead incurs revenue by charging them for ads that boost their visibility.
Global Impact?
Be that as it may, these figures are still mindblowing and force us to think on the growing power of influence of Jack Ma and Alibaba on the Chinese and further, the global market. Because, besides the sales figures being Asgardian in nature, we also saw an increase in the number of foreign brands that had participated in the sale, as compared to the previous years, where only Chinese companies invested here.
The very fact that Alibaba was able to handle such a massive undertaking without a (visible) hitch points to the increasing capability of their cloud service and payment systems. This combined with the fact that they are heavily investing in things like grocery deliveries and franchise styled supermarkets, makes them a very dangerous rival to the likes of Amazon globally and Flipkart in India.
The effects of this sale will be visible once the final accounting is done, but till then, we can only speculate how large a ripple this will cause in the global markets.
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