China's online retail giant Alibaba says it has pulled in 50 billion yuan ($8.1 billion – £5.1 billion) in sales from its annual 'Singles' Day' shopping event. Last year, Alibaba recorded sales of $5.75 billion.
Singles' Day is considered the world's biggest online retail sales day. "I bet the number [of goods bought] is going to be scary," said Alibaba's executive chairman Jack Ma last week, quoted by the BBC.
Alibaba’s operation differs from Amazon or its smaller Chinese rival, JD.com. Rather than holding inventory or delivering goods itself, Alibaba connects merchants, customers, and logistics firms to complete e-commerce sales.
It’s a model that Alibaba believes can handle the exponential growth of a holiday whose sales today are already almost 40 per cent higher than last year’s Singles Day, which itself was 90 per cent bigger than the year before.
"The most important thing is that our business model is scaleable. If we are simply keeping our own inventory, we would not be able to handle this kind of volume," Alibaba vice president Joseph Tsai told Quartz.
The company recently listed on the New York Stock Exchange. Alibaba Group Holding Ltd. surpassed Facebook Inc. by market capitalisation on its first day as a public company right from the minute it started trading and closed with a valuation of more than $231 billion.
"I’d put them (Alibaba) in a class of Facebook and Google with the scale they have, growth prospects and profitability," Scot Wingo, chief executive officer of e-commerce software provider ChannelAdvisor, told Reuters. "There’s a scarcity value there."
Founder Jack Ma has said that the company would spread its business aggressively into the US and Europe following its listing.
In Alibaba’s latest earnings report, sales in the second quarter rose 46 per cent to $2.54 billion, and net income nearly tripled to $1.99 billion from the year prior. Alibaba accounts for 80 per cent of all online retail sales in China.
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