Alibaba's Singles' Day sales surge 60 percent to $14.3B(bbc.com)
bbc.com
Alibaba's Singles' Day sales surge 60 percent to $14.3B
http://www.bbc.com/news/business-34773940
9 comments
The guy who wrote this post literally has no idea what he's talking about.
He makes two completely faulty assumptions:
1) Only Chinese people buy from Alibaba.
I co-own a retail store here in the US and we order a lot of stuff from Aliexpress. We are a Gold VIP on Aliexpress ($4,000 in sales every 90 days to maintain this level; we do about $1.5-2K/month average on there.)
If you read the reviews of products on Aliexpress, you'll see reviews in just about every language--English, French, Russian, etc. In fact, very few of the reviews are from Chinese customers. Ali is most definitely a platform (two different platforms, actually, with Aliexpress and Alibaba) for China to sell to the rest of the world. Not necessarily for China to sell to China.
2) They'd need some sort of huge fulfillment centers a la Amazon.
The genius of the Aliexpress business model is that it works like eBay (Alibaba I'd more likely compare to LinkedIn, as it's even less centralized.) Sellers fulfill orders themselves, post tracking numbers, and live chat/message with buyers to complete the loop. Some sellers take Alipay, which is the Paypal to Aliexpress's eBay. Others take Paypal, wire transfers, etc. There is absolutely no gigantic warehouse needed by Alibaba.
All of these assumptions that he guessed so wrong on could have easily been disproven by ordering a few $2 items off Aliexpress and having them shipped to his house to see how the business model works. It's pretty straightforward!
He makes two completely faulty assumptions:
1) Only Chinese people buy from Alibaba.
I co-own a retail store here in the US and we order a lot of stuff from Aliexpress. We are a Gold VIP on Aliexpress ($4,000 in sales every 90 days to maintain this level; we do about $1.5-2K/month average on there.)
If you read the reviews of products on Aliexpress, you'll see reviews in just about every language--English, French, Russian, etc. In fact, very few of the reviews are from Chinese customers. Ali is most definitely a platform (two different platforms, actually, with Aliexpress and Alibaba) for China to sell to the rest of the world. Not necessarily for China to sell to China.
2) They'd need some sort of huge fulfillment centers a la Amazon.
The genius of the Aliexpress business model is that it works like eBay (Alibaba I'd more likely compare to LinkedIn, as it's even less centralized.) Sellers fulfill orders themselves, post tracking numbers, and live chat/message with buyers to complete the loop. Some sellers take Alipay, which is the Paypal to Aliexpress's eBay. Others take Paypal, wire transfers, etc. There is absolutely no gigantic warehouse needed by Alibaba.
All of these assumptions that he guessed so wrong on could have easily been disproven by ordering a few $2 items off Aliexpress and having them shipped to his house to see how the business model works. It's pretty straightforward!
1) Only Chinese people buy from Alibaba.
The analysis points out that based on the quoted numbers the transaction volume exceeds Visa global peak traffic by about 3x. If a significant fraction of that volume was originating outside of China it would be a household name in major markets.
2) They'd need some sort of huge fulfillment centers a la Amazon.
The point is that even if Alibaba doesn't directly own or operate fulfillment and logistics they still need to be handled by somebody. If those fulfillment and logistic solutions are productive they are going to be capital intensive and would require more investment capital than Amazon and UPS combined. If they aren't productive they are going to be labor intensive and going to require a multiple of staff of those two companies combined.
Personally I think the analysis is well thought out. Assuming that the numbers aren't completely fabricated from whole cloth the only way that I can reconcile the numbers are:
1) Alibaba's logistic is massively localized and peer to peer. That means that almost all packages are moving a few blocks. Basically, packages of take out from the local shop.
2) Alibaba's transaction volume is mostly digital goods such as virtual flowers, music, etc. Not likely based on what goods are listed.
3) Alibaba is a trading platform. Gambling, currency exchange, commodities, etc. In that case Alibaba serves as a trusted intermediary. At that point transaction volume would be better compared against the NYSE than Visa or Amazon.
Personally I think the third option is most likely which would dramatically limit Alibaba's ability to monetize those transactions and it's valuation.
The analysis points out that based on the quoted numbers the transaction volume exceeds Visa global peak traffic by about 3x. If a significant fraction of that volume was originating outside of China it would be a household name in major markets.
2) They'd need some sort of huge fulfillment centers a la Amazon.
The point is that even if Alibaba doesn't directly own or operate fulfillment and logistics they still need to be handled by somebody. If those fulfillment and logistic solutions are productive they are going to be capital intensive and would require more investment capital than Amazon and UPS combined. If they aren't productive they are going to be labor intensive and going to require a multiple of staff of those two companies combined.
Personally I think the analysis is well thought out. Assuming that the numbers aren't completely fabricated from whole cloth the only way that I can reconcile the numbers are:
1) Alibaba's logistic is massively localized and peer to peer. That means that almost all packages are moving a few blocks. Basically, packages of take out from the local shop.
2) Alibaba's transaction volume is mostly digital goods such as virtual flowers, music, etc. Not likely based on what goods are listed.
3) Alibaba is a trading platform. Gambling, currency exchange, commodities, etc. In that case Alibaba serves as a trusted intermediary. At that point transaction volume would be better compared against the NYSE than Visa or Amazon.
Personally I think the third option is most likely which would dramatically limit Alibaba's ability to monetize those transactions and it's valuation.
Do countries other than China celebrate singles day?
If the price is good, I would assume customers will jump in and buy, they may even schedule their buy to align with this day, to celebrate this day or not doesn't matter imho.
For many countries, November 11 is 'Armistice Day', 'Remembrance Day', Veteran's Day, or some other day remembering those fallen in war and as such would probably take offense at any attempt to commercialise or cash-in on such a day.
I can't tell whether or not you're being sarcastic but in the US, Veteran's day usually means a major sales holiday not unlike Labor Day, Memorial Day, or Black Friday.
Ok. Interesting to know that. I wasn't being sarcastic. In Australia at least you'll still get a minute silence at 11am with schools and most work places stopping to commemorate it (it's not a public holiday).
> We are a Gold VIP on Aliexpress ($4,000 in sales every 90 days to maintain this level; we do about $1.5-2K/month average on there.)
Even $2k/month does not reach $4K per 90 days.
EDIT: Oops, sorry. I apologize for this silly error. I know it sounds bizarre, but I was converting 90 minutes to 1.5 hours a minute ago, and for some reason converted "90 days" to "1.5 months". :-)
Or maybe I can blame it on an errant gamma ray that tweaked a bit in one of my cores.... :D
Even $2k/month does not reach $4K per 90 days.
EDIT: Oops, sorry. I apologize for this silly error. I know it sounds bizarre, but I was converting 90 minutes to 1.5 hours a minute ago, and for some reason converted "90 days" to "1.5 months". :-)
Or maybe I can blame it on an errant gamma ray that tweaked a bit in one of my cores.... :D
Hopefully I'm not missing something?
90 days ~= 3 months
2k/month*3 months ~= 6k
6k > 4k
6k > 4k
Your primary school math teacher is weeping in bathroom...
For someone who's handle is "1024core" your integer arithmetic sure is pretty bad...
1. Cross border e-commerce from China is a small portion (~10%) of total e-commerce. So most of the commerce is still internal to China.
2. Who do you think directs the logistics and distribution of products. Alibaba has large stakes in logistics providers and directs the operations (Cainiao). There is no UPS/USPS type provider but a bunch of smaller ones who have to be managed by Alibaba. So while they are ramping up actual ownership of fulfillment centers, they are not like eBay where the seller just creates a shipping label drops it off at the UPS office and it shows up at the buyers door without eBay's involvement.
2. Who do you think directs the logistics and distribution of products. Alibaba has large stakes in logistics providers and directs the operations (Cainiao). There is no UPS/USPS type provider but a bunch of smaller ones who have to be managed by Alibaba. So while they are ramping up actual ownership of fulfillment centers, they are not like eBay where the seller just creates a shipping label drops it off at the UPS office and it shows up at the buyers door without eBay's involvement.
I run a taobao store - the fulfillment companies received lots of funding from Alibaba to startup in the early days, and obviously there is cooperation for example in integration of tracking systems and fraud prevention, but it's wrong to say they are managed by Alibaba. They are independent delivery companies and people use them for any and all kinds of express deliveries.
Didn't know about Cainiao, thanks!
Ad.2 Accodring to [0], thought, Cainiao is only a middleman that connects sellers with delivery companies and/or warehouses. It's a stretch to say that sellers are managed by Cainiao, I believe
[0] http://www.alizila.com/inside-cainiaos-modern-fulfillment-ce...
Ad.2 Accodring to [0], thought, Cainiao is only a middleman that connects sellers with delivery companies and/or warehouses. It's a stretch to say that sellers are managed by Cainiao, I believe
[0] http://www.alizila.com/inside-cainiaos-modern-fulfillment-ce...
I would like to add some extra information, to prove that above post is rubbish (I was shopping inside China):
- number of packages
Courier costs ~ 1.5USD, and on top of that, for 11-11 you need small amount to get it for free. As a result, I have around ~30 packages coming to me, from which 5-6 six are from Xiaomi. That's thanks to free delivery, instead of preparing what I want and bundling shopping together I just got multiple packages - and orders.
Number of delivery people:
- for singles days there are horror stories of what's happening in centers. Even thought it's against the law (I think), guys are paid for number of delivered packages, so for workers it's a gold time to work. Last year some of them were working 22 hours a day just to have a huge influx of cash
- Alibaba had tents inside office where people were sleeping. That one just for fun, not related to above :)
Overall, if his work related research is equal in quality to the one he had for this post, that's a very nice sign of not to follow him.
- number of packages
Courier costs ~ 1.5USD, and on top of that, for 11-11 you need small amount to get it for free. As a result, I have around ~30 packages coming to me, from which 5-6 six are from Xiaomi. That's thanks to free delivery, instead of preparing what I want and bundling shopping together I just got multiple packages - and orders.
Number of delivery people:
- for singles days there are horror stories of what's happening in centers. Even thought it's against the law (I think), guys are paid for number of delivered packages, so for workers it's a gold time to work. Last year some of them were working 22 hours a day just to have a huge influx of cash
- Alibaba had tents inside office where people were sleeping. That one just for fun, not related to above :)
Overall, if his work related research is equal in quality to the one he had for this post, that's a very nice sign of not to follow him.
yeah the numbers are likely fudged, but it's baffling how someone can write up that much about Alibaba group with seemingly no understanding of how the platforms work... Alibaba is like Amazon for China in scale and dominance, not in operation. it's basically like saying Airbnb is going to have to buy a ton of houses to satisfy the Christmas travel demand.
Yeah, like:
> Most people then figured that the users had multiple deliveries which is I guess a possibility.
Possibility? That's the default. Whenever I'm in China I have 5+ pending orders from Taobao at any given time. From a single battery to reels of components or $500 equipment. Pretty much always from independent distributors, often in the same city or the other 10+ million people city next doors. Often you get delivery two-three times a day with all handwritten slips and boxes of all sizes wrapped in layers and layers of tape. Whenever I go home late at night you pass the local shipping centers having spread their packages all over the sidewalk and close to my hotel there usually a few guys sorting packages in a small van and a couple of electric motorcycles.
Sure, the numbers might be inflated, but the article does the classic mistake of trying to understand China with a western mindset.
> Most people then figured that the users had multiple deliveries which is I guess a possibility.
Possibility? That's the default. Whenever I'm in China I have 5+ pending orders from Taobao at any given time. From a single battery to reels of components or $500 equipment. Pretty much always from independent distributors, often in the same city or the other 10+ million people city next doors. Often you get delivery two-three times a day with all handwritten slips and boxes of all sizes wrapped in layers and layers of tape. Whenever I go home late at night you pass the local shipping centers having spread their packages all over the sidewalk and close to my hotel there usually a few guys sorting packages in a small van and a couple of electric motorcycles.
Sure, the numbers might be inflated, but the article does the classic mistake of trying to understand China with a western mindset.
The post make sense only if you havn't ordered anything from taobao/tmall (not alibaba.com or aliexpress), and have no idea the difference between taobao/tmall and amazon/ebay and thus how logistics work for taobao/tmall.
# Disclaimer: Spent ~$200 on tmall yesterday
# Disclaimer: Spent ~$200 on tmall yesterday
Are their numbers skewed? Possible but I spent ~$300 on Aliexpress during "Singles day" and hadn't used Ali prior..
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Although I have enjoyed watching Jack Ma's journey with Alibaba, I am very skeptical of any self reported numbers coming out of Chinese markets. While i believe they have enourmous volume flowing through their services, you can never be sure how much of this is being accurately reported.
> I am very skeptical of any self reported numbers coming out of Chinese markets
Would you say that you are less skeptical of large U.S.-based companies (banks, energy, or any other sector) when self-reporting?
Would you say that you are less skeptical of large U.S.-based companies (banks, energy, or any other sector) when self-reporting?
I would say there is a greater risk of incorrect self reporting to US public companies than Chinese public companies.
I'm also skeptical since Alibaba has a history of accounting fraud.
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Why didn't Amazon think of this?
If synthesizing such a 'holiday' for the US, my guess is that a date in June might work best.
If synthesizing such a 'holiday' for the US, my guess is that a date in June might work best.
You forgot about "Amazon Prime Day", July 15...
That was an amazing time to be on Twitter. I'm excited for the next one specifically for this reason. So. Many. Jokes.
Or you put it in late november and call it "Black Friday" or "Cyber Monday"
Black Friday is a baby in comparison - just $1.35b
The article had 1.35b as an estimate for cyber monday online sales. Black friday is a lot bigger overall - on the order of 50 billion for the weekend.
Of course in the US there is no single retailer capturing such a huge share of the sales on our invented holidays. But cmon, we pretty much invented the inventing of consumer holidays.
https://en.wikipedia.org/wiki/Black_Friday_(shopping)#Retail...
Of course in the US there is no single retailer capturing such a huge share of the sales on our invented holidays. But cmon, we pretty much invented the inventing of consumer holidays.
https://en.wikipedia.org/wiki/Black_Friday_(shopping)#Retail...
Too close to Christmas to be spun as "buy something for yourself" day.
Forever Alone Day™
Maybe on February 13th? Or to be cruel Feb 29th.
Maybe on February 13th? Or to be cruel Feb 29th.
I had a Chinese teacher who told us that March 14th was White Valentine's Day, when valentine's gifts are reciprocated. A month after that, on April 14th, you have Black Valentine's Day.
Those holidays are known to wikipedia, although it attributes "White Day" primarily to Japan and "Black Day" exclusively to Korea.
So the opposite of Valentine's Day is already placed; April 14th. I don't see why Western Forever Alone Day would need to be scheduled differently from Chinese Forever Alone Day -- the date was picked for being all ones. (And, I'm told, you can celebrate by eating 1-shaped Pocky.)
Those holidays are known to wikipedia, although it attributes "White Day" primarily to Japan and "Black Day" exclusively to Korea.
So the opposite of Valentine's Day is already placed; April 14th. I don't see why Western Forever Alone Day would need to be scheduled differently from Chinese Forever Alone Day -- the date was picked for being all ones. (And, I'm told, you can celebrate by eating 1-shaped Pocky.)
I heard about this a few days ago and went for it, but my payment couldn't be processed. Got an e-mail this morning telling me that because of the high volume of sales, they had some payments failing and that I should try again... didn't exactly inspire a ton of confidence in me as a first-time buyer.
I didn't go crazy but I bought a ton of stuff on aliexpress. I buy regularily, and I saved few items to buy today. This is huge and genuinely global event.
And yet still Alibaba's share price fell nearly another 2% today. :(
Why was this down voted? Not trolling; shares of Alibaba ended down 1.99% today at $79.81 a share.
This seems counterintuitive. Since they smashed sales records I would have expected to see a bump in the shares at least today even if didn't translate to the long term.
This seems counterintuitive. Since they smashed sales records I would have expected to see a bump in the shares at least today even if didn't translate to the long term.
Does anyone know the cancel/return rate?
Wow, my network monitor and firewall just went crazy on that page. Does it really need to open more than 190 separate HTTP connections for a simple news article (many of them to shady domains)? This is downright ridiculous.
Edit: Re-installing an ad blocker to preserve my sanity.
Edit: Re-installing an ad blocker to preserve my sanity.
Which of the recent URLs is the best?
https://hn.algolia.com/?query=alibaba%20singles&sort=byDate&...
(One thing we want to make the HN software do is let users the link related URLs together and identify the best one of a set.)
https://hn.algolia.com/?query=alibaba%20singles&sort=byDate&...
(One thing we want to make the HN software do is let users the link related URLs together and identify the best one of a set.)
Based on a very quick check, these two fare much better:
https://www.techinasia.com/alibaba-crushes-records-brings-14...
http://www.bbc.com/news/business-34773940
https://www.techinasia.com/alibaba-crushes-records-brings-14...
http://www.bbc.com/news/business-34773940
They may be easier to load, but which has the best content? That's always the #1 concern here.
We've changed to the BBC url for now. Previously http://www.reuters.com/article/2015/11/11/us-alibaba-singles....
We've changed to the BBC url for now. Previously http://www.reuters.com/article/2015/11/11/us-alibaba-singles....
These news pages have dozens of tracker. All those phone home. Ghostery to the rescue. Block all of them.
Edit: I've just turned off Ghostery and AdBlocker. Ghostery reports that page has at least 39 trackers.
Edit: I've just turned off Ghostery and AdBlocker. Ghostery reports that page has at least 39 trackers.
14 billion HTTP connections!
a terrifying number, hard to fathom really. Unbridled seemingly mindless consumption
http://brontecapital.blogspot.com/2015/09/job-interview-ques...