SHANGHAI (Reuters) - Alibaba (19459003) BABA.N ), the Chinese e-commerce giant, said on Saturday its Singles' Day sales extravaganza hit $ 25.4 billion, smashing its own record from last year and cementing it as the world's biggest shopping event.
Once a celebration for China's lonely hearts, Singles' Day has become an annual 24-hour buying frenzy that exceeds the combined sales for Black Friday and Cyber Monday in the United States, and acts as a barometer for China's consumers .
As tills shut midnight on Saturday, Alibaba's live sales ticker registered 168.3 billion yuan, up 39 percent from 120.7 billion yuan last year. The dollar figure was up more steeply due to the strength of the yuan against the greenback this year.
The event started soon after a star-studded event in Shanghai late on Friday. As midnight hit, a deluge of pre-orders helped drive a billion dollars of sales on Alibaba's platforms in the first two minutes and $ 10 billion in just over an hour.
"In terms of scale it just dwarfs any other event out there," said Ben Cavender, Shanghai-based principal at China Market Research Group.
At just past the halfway mark, the headline gross merchandise volume swept past last year's total dollar just shy of $ 18 billion. Shortly afterwards, sales surpassed the 2016 total in the local currency.
The event gets shoppers around China scouting for bargains and loading up their online shopping carts, while delivery to - and robots - brace for an estimated 1.5 billion parcels expected over the next six days.
"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. " "This powerful group is propelling the consumption of China," he said.
The final total - more than the GDP of Iceland or Cameroon - leaves other shopping days in the shade. Cyber Monday in the United States saw $ 3.45 billion in online sales last year.
Investors closely watch the headline number, though some analysts say it is calculated is too opaque. The U.S. The 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 percent increase logged in 2015.
SLOWER GROWTH?
At Alibaba's Friday night gala, the company's co-founder and chairman, Jack Ma, hosted guests including the actress Nicole Kidman, singer Pharrell Williams and Chinese musicians and film stars such as Zhang Ziyi and Fan Bingbing.
The excitement around the shopping blitz, however, masks the challenges facing China's online retailers such as Alibaba and JD.com Inc. ( JD.O ), which are having to spend more to compete for shoppers in a broader economy where growth is slowing.
"Matthew Crabbe, Asia Pacific's research director at Mintel." A lot of the lower hanging has been picked and there's increased competition for a share of consumer spending. " The sale did though beat his forecast of 20 percent growth.
Online retailers are being forced to push new shoppers, and the whole online retail market is close to "saturation", raising questions about how rapid growth could be sustained.
"They're having to spill over out of the purely online realm into the wider consumer market," Crabbe said.
This has sparked deals to buy bricks-and-mortar stores in China, and overseas tie-ups especially in Southeast Asia. Technology, too, has been key, with virtual reality dressing rooms and live fashion shows to attract shoppers.
Alibaba also said it had turned 100,000 physical shops around China into "smart stores" for this year's event. Goods perused by people at the stores, but then bought and paid for on Alibaba's platforms, were added towards the total sales.
China Market Research Group 's Cavender said the price is likely to increase, and the demand for deposits in advance. In previous years, prices were often halved.
Fu Wenyue, a 23-year-old dresser in Shanghai, said that "personalized" as the brands are used to hone their targets. 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 more than I did last year," she said.
Reporting by Adam Jourdan and SHANGHAI newsroom; Editing by Ian Geoghegan and Ros Russell
