How Alibaba’s Singles’ Day Became Biggest Shopping Spree Ever

In just over a decade Alibaba Group Holding Ltd. turned Singles’ Day, a quirky celebration of Chinese singlehood, into the world’s biggest shopping event, drawing in hundreds of millions of people across the globe. This year’s extravaganza will be closely watched by investors keen to gauge how willing Chinese consumers are to spend in the wake of the coronavirus pandemic — and how eager U.S. merchants are to return amid Washington’s escalating drive to curb Chinese technology giants.

1. Why is it called Singles’ Day?
When Nov. 11 is written numerically — 11/11 — the four digits evoke “bare branches,” a Chinese expression for the unattached. On Chinese university campuses in the 1990s, 11/11 evolved into a celebration of being single in a culture where young people face heavy parental pressure to get married — an antidote to Valentine’s Day. The country’s rising middle class turned that into a phenomenon.

2. Why does it revolve around shopping?
As he began building Alibaba, co-founder Jack Ma latched on to the idea of centering a shopping promotion around a holiday, drawing inspiration from the tradition of U.S. retailers offering mega-discounts on the day after Thanksgiving (which became Black Friday). His Singles’ Day promotion started in 2009. Early on, consumers were urged to treat themselves in celebration of being single. Soon all demographics were being targeted.

3. What’s different this year?
The landscape. With much of the world still gripped by the coronavirus pandemic, China has emerged as the world’s only major growth engine. Global companies are looking to the Chinese consumer to help recoup some of their lost sales. Meanwhile, Chinese tech titans including Huawei Technologies Co., TikTok operator ByteDance Ltd. and entertainment giant Tencent Holdings Ltd. (creator of the WeChat app) have come under more pressure in the U.S. over national security issues, culminating in sanctions or blacklisting in some cases. Alibaba Chief Executive Officer Daniel Zhang repeatedly touts his company’s role in connecting American sellers with Chinese buyers. But it hasn’t escaped wholly unscathed. U.S. Secretary of State Mike Pompeo started a Clean Network Initiative to try to get U.S. firms to stop using cloud-computing services offered by Alibaba and other Chinese companies.

4. What about Ma’s other big creation, Ant?
Alibaba’s fintech affiliate Ant Group Co. was headed toward the world’s largest initial public offering before Chinese regulatory changes torpedoed the listings in Hong Kong and Shanghai in early November. That’s unlikely to affect the backroom operations of Ant’s best-known consumer product — the Alipay digital wallet — which will again underpin the vast majority of transactions on Singles’ Day across all of Alibaba’s platforms. Longer term, Alibaba enjoys an unusually close relationship with Ant, whose microlending services also drive consumption. Alibaba executives have said they’re evaluating the impact of regulatory scrutiny over Ant on their own e-commerce business.

5. How much gets sold?
Every year has exceeded the one before. Last year an estimated half a billion shoppers bought more than 268 billion yuan ($38 billion) worth of goods on Alibaba’s platforms during the event — more than the entire, five-day U.S. buying spree that begins on Thanksgiving and ends on Cyber Monday. The 2018 figure of $31 billion was up 27% from the previous year.

6. Is Singles’ Day only for Chinese?
No. While most sales are domestic, Alibaba has been trying to make it more global. That means getting foreign brands involved; more than 2,600 new ones will be featured on Tmall Global this year. In 2019 Americans commanded the second-highest sales among importers, behind Japan but ahead of South Korea, Australia and Germany. The company this year held a Go Global 11.11 Pitch Fest aimed at small- and medium-sized U.S brands, offering them a chance to be spotlighted during the event. It’s also working to promote its English-language websites such as the wholesaling platform; AliExpress, which targets consumers outside China; and Lazada, Alibaba’s Southeast Asian operation.