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Alibaba broke its sales record from last year's Singles' Day just 20 hours into the event, China's biggest online shopping holiday of the year.
The e-commerce giant's sales dwarf Cyber Monday, the US' equivalent online shopping extravaganza. Although the total was actually short of the expected goal, underlying trends indicate that Alibaba is poised to continue generating Singles' Day sales growth in the years to come.
Alibaba continues to drive successful results on Singles' Day:
Last year's record was shattered: In total, Alibaba processed $17.7 billion in sales during Singles' Day 2016. This sets a new record over last year's total of $14.3 billion. Meanwhile, Cyber Monday sales in the US are expected to total just $3 billion, according to Alizila.
Consumers bought at record speed: Just 40 seconds into the Singles' Day event, Alibaba had already exceeded $100 million in gross merchandise volume (GMV), which ballooned to $1.4 billion at the six minute mark.
But growth in total sales is slowing: Year-over-year (YoY) sales growth has consistently dropped over the years, falling from 84% in 2013 to 24% in 2016. This isn't cause for concern as each year sales are growing from a larger base, though this year's results did end up short of the expected $20 billion in sales.
Two factors make it possible for Alibaba to continue capturing sales growth in the coming years.
E-commerce still has fairly low penetration in China: Just 10% of China's retail sales derive from digital channels, according to Alibaba CEO Daniel Zhang. This provides Alibaba with long-term opportunities to transition more of the retail industry to digital.
Mobile dominated as a channel this year: Nineteen hours into Singles' Day, mobile comprised 82% of gross merchandise volume (GMV). Mobile devices encourage repeat purchasing and engagement more so than desktop computers. Therefore, as mobile increases its dominance, Alibaba can boost average order volume per user.
E-commerce has been on the rise in the last several years, thanks in large part to titans in the industry such as Amazon and Alibaba. E-commerce will truly become the future of retail, as nearly all of the growth in the retail sector now takes place in the digital space.
BI Intelligence, Business Insider's premium research service, forecasts that U.S. consumers will spend $385 billion online in 2016. Moreover, BI Intelligence predicts that number will grow to $632 billion in 2020.
This is hardly surprising considering e-commerce's healthy growth. Though the U.S. retail average growth rate in the first half of 2016 was just 2% for total retail, it was 16% for e-commerce.
The number of online shoppers has grown by nearly 20 million from 2015 to 2016. And these 224 million shoppers are spending more, as the total amount spent online grew from $61 billion in the first quarter of 2015 to $68 billion in Q1 2016. Finally, these customers are transacting more frequently, as the number of online transactions has risen by 115 million from 2015 to 2016.
But all of this shopping online creates its own set of challenges, both for consumers and the companies that are trying to get their products onto shoppers' screens and into their shopping carts. In short, you need a plan.
And to create your ultimate e-commerce battle plan, you need the right intel.
BI Intelligence is here to help.
Our team of industry experts has you covered on topics such as:
Shopping cart abandonment
Marketing effectiveness
Merchandise returns
Customer satisfaction
Social media monetization
Mobile payments
Accommodating shoppers at the 11th hour
And much more
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