Alibaba prepares retail experiment for Singles’ Day
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Alibaba prepares retail experiment for Singles’ Day

Chinese Ecommerce giant Alibaba is planning to reinvigorate physical retail this November 11, as it unveils a bold new plan for Singles’ Day. Singles’ Day is the cynical alternative to Valentine’s Day that has taken hold in the country – it is a bigger Ecommerce opportunity than both Black Friday and Cyber Monday.

The day originated in the 90s with young, male, college students, but it has since taken hold of the public imagination, and is celebrated by both genders and all ages. Partly, this is due to a growing gender imbalance – by 2020, China will have 35 million more men than it does women – and partly, it’s down to the power of retail: Alibaba is largely responsible for the transformation of the day from an excuse to go out to Karaoke bars with your single mates into the country’s premier online shopping opportunity.

Alibaba’s share price has appreciated 110% so far this year!

alibaba sales1011

SOURCE: Yahoo Finance

Alibaba wants to spur its Singles’ Day sales to even greater heights by taking ‘mom-and-pop’ businesses online. The company enlisted a full 10% of China’s convenience stores – 600,000 outlets – to act as part of its retail empire this weekend.

The idea is to connect Alibaba’s “virtual” presence with brick-and-mortar retailers, which will become delivery and storage centres, and draw more customers onto Alibaba’s online ecosystem, amassing valuable purchasing data on an unprecedented scale. In the month prior to Singles’ Day, Alibaba staff have been travelling the country upgrading inventory systems.

John Choi, an analyst at Daiwa Securities Group Inc., thinks that this paints an important picture of the state of Ecommerce in the country. He says: “You can see from this retail strategy, China is actually leading the path. Singles’ Day will be a good opportunity to test the new strategy and to show consumers how online and offline could work together.”

100,000 of these retail outlets will be transformed into “smart stores” where customers can check availability of items at other locations and get goods delivered to their homes. This is the latest in a years-old strategy by Alibaba to push into physical retail – it’s early days, so who knows how it will go. But one thing is for certain: the rewards of getting it right could be huge.

Disclosure

Dominion holds Alibaba in its Global Trends Ecommerce Fund.


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