China's Singles Day

 
Participants take part in a bachelors' meeting event ahead of Singles Day

China's Singles Day is a modern twist on Valentine's Day with lucrative results for China's biggest e-commerce companies. Sales online in China have exceeded the two biggest shopping days in the US combined. Black Friday and Cyber Monday are dwarfed by the estimated $5bn from one single day of shopping in China.

Today, 11 November, is China's Singles Day. For the millions of singletons out there, it's an excuse to splurge on yourself… online.

This version of the traditional Valentine's Day was begun by the e-commerce giant Alibaba, which does not sell merchandise itself but offers a platform for vendors through Tmall and Taobao. Alibaba though offers an online payments system, which helps Chinese consumers buy online. The online payments infrastructure, like many parts of the financial sector, is underdeveloped. It's why Alipay has proved to be an important part of Alibaba's business. Alibaba dominates this day, where its platforms account for some 70% of the sales.

It's not a surprise that online Chinese shoppers in one sense can outspend that of Americans since they are about equal in number. Both nations have about 270 million. But, the internet penetration in China is only around 45% and, of course, they have about another billion people who can get into the spending habit.

But, in another sense, given that Chinese incomes are one-seventh of that the US, it is rather a surprise. It reveals how misleading averages can be, since China has a highly unequal income distribution, even more so than the US.

What is apparent though is that the growth in online shopping in China has benefited technology firms. Alibaba is currently not publicly traded, though its upcoming IPO is much anticipated. Its rival Tencent, which is listed, has seen its shares rise by more than 60% this year.

Given the lucrativeness and perhaps relative ease of buying for oneself, I wouldn't be surprised if Singles Day starts to appear in calendars around the world.

 
Linda Yueh Article written by Linda Yueh Linda Yueh Chief business correspondent

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  • rate this
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    Comment number 30.

    Miao, you just made me laugh to death!

  • rate this
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    Comment number 29.

    Price of a trinket from Ali Baba to celebrate China's Singles Day? 10 yuan

    Watching American poster's like Sieuarlu defecate in their pants at the thought of a rising China....Priceless!

  • rate this
    -1

    Comment number 28.

    When nearly a billion people in China realize that getting out of poverty is not going to be their reward too, how will they react? What kind of rage will there be. A Valentine's Day massacre? There are more people in China living on $2 a day or less than the entire population of the EU.

  • rate this
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    Comment number 27.

    Among the looming problems for China is its aging population. Workers aspiring to make more money are moving to cities leaving their older relatives behind to fend for themselves. Who will take care of them or will they just be left to die? Japan per capita is a far wealthier nation and has its own problems with aging. It's not a model for China. China can't afford it.

  • rate this
    -1

    Comment number 26.

    Enjoy the party while it lasts China. Economists who take recent events and project them out into the indefinite future sometimes paint a ridiculous rosy picture. It is important to understand the underlying causes of why China has grown and prospered so quickly. That leads to a conclusion that it is not sustainable over the long run. The list of reasons is so long you can hardly count them.

 

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