Singles Day sale pushes e-shopping to the limit

(Ecns.cn) -- More than 10 billion yuan (US$1.6 billion) was spent in the first 14 hours of a "Singles Day" promotion held Sunday by China's largest online retailers Tmall and Taobao, according to e-commerce giant Alibaba Group.

That surpasses the record set by Cyber Monday last year, the busiest day for online retailers in the United States, the Beijing Times reports.

As operator of China's biggest e-commerce platforms, Alibaba consolidated its position in the cut-price event with a 24-hour turnover of 19.1 billion yuan (US$3.06 billion). The company has officially made Singles Day – an original holiday created in China – the biggest e-commerce sales day in the country and possibly the world.

Other e-retailers such as Suning, Gome and 360buy also rushed to cash in. In fact, 77.5 percent of China's e-retailers joined this year's Singles Day promotion, making it a veritable online shopping bonanza, according to the Beijing Times.

Yet the event was not without its problems.

The annual Singles Day carnival is a new method that can better integrate supply chains, network operations and marketing, says Tmall president Zhang Yong, but this year's big sales exposed many shortcomings, especially in network operations.

In the first minute after midnight on Sunday, more than 10 million registered users logged on to Tmall.com, nearly causing the site to crash. Nevertheless, Tmall's turnover reached 250 million yuan (US$40.1 million) in the first ten minutes.

Most online banking systems were also confronted with problems caused by traffic jams in their payment channels, which resulted in numerous consumer complaints. These problems have shown us that there is much room for improvement when handling similar situations in the future, Zhang says.

However, many consumers discovered something fishy about the behavior of some e-retailers during the promotion.

In the first minute of the sale, Miss Li refreshed her online shopping cart on Tmall, but noticed that three out of the five products she had favorited were sold out.

As for the other two, one was half-priced and the other was still on sale, but only after its price had been raised, says Li.

Tmall merchants should not use such tricks, she says. Consumers will feel like they are being cheated when they notice that product prices are not as low as they were led to believe.

Meanwhile, experts point out that such a large scale promotion only brings spending forward: Consumers react to deep discounts and buy early, but this will probably lower demand in the following months and cause a sudden slump in consumption.

If that happens, a flat market will not only affect online businesses, it may also pain traditional retailers.

Merchants that couldn't afford to lower prices had to watch the promotion happen without joining it, but will still experience a sluggish period after it's over, experts say.

Moreover, such a massive promotion puts too much pressure on courier service providers, notes the Beijing Times.

A week prior to the sale, express delivery firms all began to make preparations to handle record levels of business. Yet when Singles Day arrived, couriers still complained they didn't even have time to drink a glass of water as the orders piled up.

From another perspective this is also good news, because it provides an opportunity for logistics to improve and match up to the massive demand on such occasions, explains a courier from STO Express Co Ltd.

According to a survey conducted by the China e-Business Research Center, over 90 percent of China's e-commerce sites are planning similar promotions on other upcoming occasions, such as Christmas and New Year.