Alibaba's 11.11 GMV up 32% this year; major takeaways from a mega-sale

Alibaba generated RMB 120.7 billion (US$17.79 billion) in gross merchandise volume (GMV)—mostly on B2C site Tmall and C2C site Taobao—in this year's 11.11 shopping festival. That figure represents a 32 percent jump from last year. GMV soared past RMB 100 million in just 40 seconds on 11 November, while it took just six minutes and 58 seconds to reach RMB 10 billion.

No surprise; it's another record breaking year. After wowing over the numbers (see infographic below for full set), here's a few things of note for next year:

This year’s 11.11 is a preview of the future of retail

The future of retail is one where entertainment and commerce intersect seamlessly, said Daniel Zhang, chief executive officer of Alibaba Group. Say no more, because no other shopping festival includes a star-studded televised gala that featured appearances from basketball legend Kobe Bryant, English footballer David Beckham and US pop group OneRepublic.

In addition, Alibaba this year made a significant push outside the realm of pure sales to include increasing levels of interactivity. Chief among those was a virtual-reality shopping experience, Buy+, in which users could shop for and purchase goods in a VR environment. An augmented-reality game 'Finding the Carnival Cat' a Pokemon Go-style game saw players to chase Tmall’s cat mascot into real-world retailers and restaurants such as Intime malls, Starbucks outlets and KFC locations. 

11.11 isn’t a purely Chinese affair from now on, but...

According to Alibaba, 235 countries and regions completed cross-border transactions during the festival, but there are challenges inherent in taking the festival into Europe or the United States. Singles Day is up against other big e-commerce days that come only a couple of weeks after 11 November, after all.

While Singles Day awareness in the west may be high, there’s an issue with the timing when it comes to driving incremental revenue for brands, said Practicology's founder & CEO Martin Newman. Black Friday is still the predominant online shopping day in the US, since it brings demand forward from Christmas, he said.

Singles Day also started from a self-gifting proposition, which Newman said is "interesting" but "not 100 percent sure whether Alibaba will be able to use that cultural translation to get the same level of traction globally". 

More accreditation needed to invalidate counterfeit goods

This is the biggest barrier for Chinese e-commerce platforms big and small, even JD, Suning or Guomei if Singles Day were to be promoted in the west in 2017. Brands need their own manual interventions apart from only relying on Alibaba's anti-counterfeiting efforts, said Newman. Despite making submissions to the USTR (United States Trade Representative), trade groups are still complaining of the rampancy of Alibaba merchants passing off counterfeit goods as genuine, and this problem isn't expected to disappear in the short term. 

"Perhaps there can be some way in the supply chain that can leverage technology to put a trust stamp on your products, or that consumers can view the sourcing process of goods made in China," Newman suggested. This is a relatively untapped field for both brands and e-commerce consultancies to invest in.

Skechers Hong Kong's senior vice president Vincent Leung shared how the shoe brand's legal department in China is suing fake shops "on a weekly basis". The company also tries to do trademark registrations as quickly as possible in as many markets as possible, he added.

"These are other means of protecting our brand," he said.

Ecommerce must still consider UX

Newman calls the intersection of entertainment and commerce “retail theatre”, but warns against having too much content that can get into the way of customers buying.

"Say a brand has a product video or celebrity live-stream, after viewing that video I have to close that video, and go onto a complicated path to look for the product to actually buy it," said Newman. User experience on Chinese ecommerce sites are very busy-looking and bombarding, and for Singles Day to appeal to Western consumers, retailers need to make the information architecture of their ecommerce pages "very clear".

Alibaba's logistics annoyances outside of China, like the Tmall Hong Kong app not showing prices in Hong Kong dollars, charging customers an extra 3 percent for credit-card transactions, and the hassle of topping up an Alipay Hong Kong account offline (at 7-Eleven or Circle K stores) are teething issues waiting to be solved before global expansion can be smooth, said Leung.

From a brand's perspective, merchants participating in Alibaba's Greater China foray this year had to separate their inventory counts for the mainland and for Hong Kong, because technically Tmall.com and Tmall.hk are two separate platforms. "We could not have a single view of how our stock is moving," revealed Leung. "Alibaba has a lot of tweaking to be done".