OK, Cyber Monday, let’s see what you’ve got. China’s equivalent – Singles’ day, or Double 11 – is already twice the size of the US post-Thanksgiving online shopping bonanza. Such “Hallmark” holidays are criticised for having no meaning. That misses the point: who cares, so long as everyone gets what they came for? Chinese shoppers seem happy. But retailers’ profits are another matter.
November 11 has been dubbed Singles’ day in China for its four ones when written out. Alibaba, China’s biggest online retail platform, commercialised it with headline-grabbing discounts from the merchants it hosts. This year gross sales through its Taobao and Tmall platforms on Sunday rose fourfold from the same day last year to Rmb19.1bn, or $3.1bn – double Cyber Monday’s take in the US last year. And that does not include rivals’ attempts to get in on the act. Sales at Suning, an electronics retailer that is expanding online, beat expectations 20-fold over the weekend, according to RedTech Advisors. Tencent, China’s biggest internet company, saw sales on its nascent retail channel jump 630 per cent, albeit to just Rmb50m.
Cyber Monday follows Black Friday, supposedly the day when US retailers enter net profit for the year. If only it were so in China, where online hopefuls were engaged in a to-the-death battle for market share on wafer-thin margins even before offering more eye-catching bargains. China’s second-biggest online retailer, 360Buy, has yet to turn a profit. Suning’s operating margin has almost halved in a year to 2.6 per cent while rival Gome is lossmaking. At least Alibaba’s agency model benefits regardless of who discounts what. Filings from Yahoo, its one-quarter owner, show its top line rising 75 per cent and an operating margin of two-fifths. Some day Alibaba will float. Until then those interested in China’s growing shopping habit are best off searching the sales like everyone else.