Singles Day promotions kindle China's spending power

Workers sort outpiled-up packages at YTO Express' sorting center in east China'sShanghai Municipality, Nov. 9, 2013. As the Chinese grassroots'self-proclaimed Singles' Day, which falls on November 11, gainspopularity, the country's e-commerce websites have grasped thechance to make money. The surging package volume caused greatpressure for many express delivery companies. (Xinhua/Chen Fei)

Over 100 freighter aircraft and countless high-speed rail carriages and vehicles are gearing up to shuttle around Chinese cities for the shopping carnival of Singles Day on Monday.

The online shopping spree on Nov. 11., initiated in the name of "Singles Day," a celebration for those not paired off, has become the country's most popular annual commercial holiday and created an e-commerce miracle.

However, what Chinese e-commerce enterprises are concerned most about right now is not their sales volume, but the herculean task of actually delivering the goods.

In some major cities, express companies are sorely lacking manpower after many staff have quit, preferring not to face the flood of goods.

"It is destined to be a nationwide online retail frenzy. Chinese customers have no lack of spending power, but just need an ignitor," said Zhang Yong, chief operating officer of e-commerce giant Alibaba Group, operator of Taobao.com and Tmall.com.

According to Zhang, "Singles Day released both customers' desire and the sales channels. Alibaba provided the kindling in igniting the mass effect and appeal of e-commerce."

E-COMMERCE CREATION, MASS CARNIVAL

Singles Day became 24 hours of crazy online shopping when Alibaba launched its first sales campaign on Nov. 11, 2009.

Since then, Singles Day sales at Tmall snowballed from 50 million yuan (8.2 million U.S. dollars) in 2009 to 19.1 billion in 2012, and are poised to top 30 billion this year.

About 10 million online shoppers rushed to Alibaba within the first minute of last Singles Day. And their order volumes amounted to 100 million yuan by the end of the second minute on Tmall.

Alibaba on Thursday announced its opening of Singles Day "overseas fairs," specially-designed sales channels to allow overseas customers to join the shopping carnival.

Netizens abroad can access versions of Alibaba's content in both traditional Chinese characters and English. What's more, many will be able to access subsidized overseas shipping from Alibaba.

"It is so warming to see pages in traditional cantonese on this year's online fair for Hong Kong residents," said an online customer surnamed Shi in Hong Kong.

"I am ready for joyful shopping for familiar international brands," she said, adding that it will be more convenient and better value with Tmall providing an international delivery platform.

The enormous market has lured all major e-commerce firms to try to take a slice of the pie.

Even a month ahead of Singles Day this year, an advertising campaign started among the e-commerce giants like Tmall, Jingdong and Suning.

RELEASING SPENDING POTENTIAL

Of course, China's government is delighted with the efforts of these players having unleashed a major force for the national economy.

Taobao has made Nov. 11 "Chinese customer day," Jack Ma, founder of Alibaba Group, told Chinese Premier Li Keqiang at a recent meeting on the economic situation.

The premier replied, "You created a time-point of consumption."

The Chinese leadership is striving to steer the country's economy with a slower, more sustainable growth model based on domestic consumption instead of investment and exports. Online shopping is no doubt a growth point to release spending potential, insiders have noted.

During times of global economic downturn, the government would rather encourage domestic consumption than release a stimulus package, indicating tolerance for slower growth during the reform process, said Xu Shaoshi, minister in charge of the National Development and Reform Commission.

China had 564 million netizens as of the end of last year.

As online retailers and conventional stores square off in the world's largest Internet community, online retail sales have risen steeply, reaching 1.3 trillion yuan in 2012, according to the China e-Business Research Center.

The figure accounted for 6.3 percent of the retail market in 2012 and is likely to expand to 7.4 percent this year.

With an estimated 296 billion U.S. dollars in online retail sales, China will soon surpass the United States as the world's largest online retail market.

"The emerging time-points of online consumption attract millions of people to spend money and enjoy life. E-commerce opens a new channel for China to stimulate domestic demand," said Liu Yin, vice president of the China International Electronic Commerce Center.

More importantly, it promotes employment and the logistics industry with its sales model of "online purchasing plus express delivery," he added.

E-commerce is only likely to become stronger as online shopping spreads throughout China. Taobao has recorded surging purchases from third- and fourth-tier cities, as well as medium and small towns in the past three years.

"E-commerce is quickly extending to these regions, which are immature in conventional retail networks. And the country's ongoing urbanization will definitely bring a boom to the new business model," Liu added.