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szdaily -> In depth -> 
Singles’ Day offers spark spending power
    2013-11-12  08:53    Shenzhen Daily

    OVER 100 freighter aircraft and countless high-speed rail carriages and vehicles are shuttling around Chinese cities for the shopping carnival of Singles’ Day on Monday.

    The online shopping spree Nov. 11, initiated in the name of “Singles’ Day,” a celebration for those not paired off, has become the country’s most popular annual commercial promotion day and created an e-commerce miracle.

    However, what Chinese e-commerce enterprises are concerned most about right now is not their sales volume, but the herculean task of actually delivering the goods.

    In some major cities, express companies are sorely lacking in manpower after many employees have quit, preferring not to face the flood of goods.

    “It is destined to be a nationwide online retail frenzy. Chinese customers have no lack of spending power, but just need an ignitor,” said Zhang Yong, chief operating officer of e-commerce giant Alibaba Group, operator of Taobao.com and Tmall.com.

    According to Zhang, “Singles’ Day released both customers’ desire and the sales channels. Alibaba provided the kindling in igniting the mass effect and appeal of e-commerce.”

    Mass carnival

    Singles’ Day became 24 hours of crazy online shopping when Alibaba launched its first sales campaign Nov. 11, 2009.

    Since then, Singles’ Day sales at Tmall snowballed from 50 million yuan (US$8.2 million) in 2009 to 19.1 billion in 2012, and are poised to top 30 billion this year.

    About 10 million online shoppers rushed to Alibaba within the first minute of last year’s Singles’ Day, and their order volumes amounted to 100 million yuan by the end of the second minute on Tmall. This year, the figure, 100-million-yuan sales revenue, was reached within 55 seconds.

    Alibaba on Thursday announced its opening of Singles’ Day “overseas fairs,” specially designed sales channels to allow overseas customers to join the shopping carnival.

    Netizens abroad can access versions of Alibaba’s content in both traditional Chinese characters and English. What’s more, many will be able to access subsidized overseas shipping from Alibaba.

    “It is so warming to see pages in traditional Cantonese on this year’s online fair for Hong Kong residents,” said an online customer surnamed Shi in Hong Kong, adding that it will be more convenient and a better value with Tmall providing an international delivery platform.

    The enormous market has lured all major e-commerce firms to try to take a slice of the pie. Even a month ahead of Singles’ Day this year, an advertising campaign started among the e-commerce giants like Tmall, Jingdong and Suning.

    Courier service in short

    Nine o’clock in the morning is never too early for Dai Haitao to begin his work as a courier in Shanghai. Dai said he delivered about 100 parcels a day in usual, but the number surged a week before the Nov. 11 shopping carnival.

    “More and more parcels are coming in. The number of parcels grew from 120 to 140 these days. I am very busy. Online retailers are offering discounts, and people who would normally buy one or two items are now buying four or five,” Dai said in a CCTV interview Friday.

    Dai said he was lucky to have 15 minutes for lunch on that day. But he said an on-time scheduled lunch will be a luxury during the shopping spree.

    More than 20,000 vendors on Alibaba’s sites — Tmall and Taobao — promised 50 percent discounts Nov. 11. Major competitor JD.com promised speedy delivery as well. Some other online shopping sites like Shanghai-based Yihaodian, which was just purchased by Walmart last year, has even extended the sales period to the weekend after Nov. 11.

    Last year delivery firm Shentong shipped more than 8 million items during the shopping frenzy. The company has a staff of over 150,000, and expects things to be even busier this year.

    “At a regional delivery center in a city like Shanghai, we usually use about 40 trunks, but we borrow another 30 for the Nov. 11 peak. We delivered 78 million parcels a day nationwide last year. That was already a miracle, but the figure will reach 200 million this year,” said Chen Yu, manager of Shentong Express.

    Recruiting agencies in Shanghai said they received more business from delivery companies who are asking for extra workers four months ahead of the festival.

    “The recruiting began as early as this July and August when we saw a big increase in job offers. According to our nationwide database, the number of job offers in delivery companies has increased at least 20 percent year on year. Many companies are looking for professional human resource companies to help with the extra workers, because they can’t handle the large-scale influx,” said Wei Zimin, director of Daguu.com.

    Releasing spending potential

    China’s government is delighted with the efforts of these players, having now unleashed a major force for the national economy.

    Taobao has made Nov. 11 “Chinese customer day,” Jack Ma, founder of Alibaba Group, told Premier Li Keqiang at a recent meeting on the economic situation.

    The premier replied: “You created a time-point of consumption.”

    The Chinese leadership is striving to steer the country’s economy with a slower, more sustainable growth model based on domestic consumption instead of investment and exports. Online shopping is no doubt a growth point to release spending potential, insiders have noted.

    During times of global economic downturn, the government would prefer to encourage domestic consumption rather than release a stimulus package, indicating tolerance for slower growth during the reform process, said Xu Shaoshi, minister in charge of the National Development and Reform Commission.

    China had 564 million netizens as of the end of last year.

    As online retailers and conventional stores square off in the world’s largest Internet community, online retail sales have risen steeply, reaching 1.3 trillion yuan in 2012, according to the China e-Business Research Center.

    The figure accounted for 6.3 percent of the retail market in 2012 and is likely to expand to 7.4 percent this year.

    With an estimated US$296 billion in online retail sales, China will soon surpass the United States as the world’s largest online retail market.

    “E-commerce opens a new channel for China to stimulate domestic demand,” said Liu Yin, vice president of the China International Electronic Commerce Center.

    More importantly, it promotes employment and the logistics industry with its sales model of “online purchasing plus express delivery,” he added.

    E-commerce is only likely to become stronger as online shopping spreads throughout China. Taobao has recorded surging purchases from third- and fourth-tier cities, as well as medium and small towns in the past three years.

    (SD-Xinhua)

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