During the Chinese equivalent of Black Friday, November 11, Alibaba processed more than $5.75 billion in sales. In contrast Americans spent $1.9 billion dollars online during Black Friday and Thanksgiving
The Alibaba sales were processed by its subsidiaries Tmall and Taobao. On Tmall, big brands sell to consumers. On Taobao, small businesses and consumers sell to consumers.
November 11 is known as “Singles Day” in China. Like Black Friday, it’s a holiday made up for business purposes. It’s supposedly a celebration of single people. Alibaba picked the date because of all those ones in 11/11.
Why are there so many sales on Tmall and Taobao on 11/11? There are a lot of Chinese Internet users. One estimate I hear a lot is 500 million. There are only 330 million or so people in the United States. In China, there are lots of cities with millions of people in them and no malls or big offline retail centers. China has leap-frogged the whole mall and big box movements the US went through in the second half of the 20th century. Shopping online is the only way to shop. It is free for merchants to set up stores on Taobao and Tmall. Alibaba only makes money by selling ads to those merchants. Less cost and friction in the store set-up process means more merchants, cheaper prices, and more sales. They trust Alibaba because of Alipay – a payment service which keeps the funds in retail transactions in escrow until both the buyer and the seller are happy.
Source: Business Insider