Alibaba, the Chinese Internet retailer, broke all records for sales in a single day, selling a record $25 billion of goods on November 11. What’s behind this startling event?
There are widely disparate views of China by many in the United States. Some consider China to be a third-world country, with underage laborers slaving in dirty factories stealing our jobs. Others see it as a country that’s leading the world in modernizing and developing state of the art transportation systems, skyscrapers, and Internet technologies.
Having been to China scores of times, the truth is much closer to the latter. Much of its advancement is the result of a growing, thriving middle class, about 300 million strong, along with an amazing level of innovation from a country that was once known only for its copying.
China is leading or will soon be leading the world in solar and other green energy hardware, battery technology, high-speed trains, airports, electric cars, and now, as just evidenced, e-commerce.
Using the occasion of Singles’ Day, a holiday created a number of years ago for single people in China, Alibaba turned it into a version of our Black Friday, the big sales day following Thanksgiving Day. But Alibaba’s single-day sales were double the sales of Black Friday and Cyber Monday combined. More than 500 million consumers visited sites run by the company, purchasing everything from wine to electronics to automobiles.
For Alibaba, that comes from its Taobao marketplace and Tmall brand store, plus international sales. All told, Alibaba handled 1.48 billion transactions during the 24-hour period. (While the two sites noted here are in Chinese, look at the pictures to get a sense of their scope.)
Alibaba, often compared to Amazon, is much larger and much more pervasive. The company sells most everything, much like Amazon, but they’ve also created the websites for and brought online more than 100,000 retail stores to attract new shoppers that might not have used the Internet.
To support this huge business, Alibaba created Alibaba Cloud, which has server farms on five continents and in eight countries. While Amazon and Microsoft, the No. 1 and No. 2 cloud providers globally, have tried to compete, they’ve been shut out by Chinese regulators. For better or worse, the Chinese government has been instrumental in promoting its private industries throughout the world using sites such as Alibaba to connect customers, along with preventing outside competition. They look at Alibaba as a means to grow China’s influence in world commerce.
Alibaba was founded by a schoolteacher, Jack Ma, just 18 years ago. He began his business by creating a listing service to connect small Chinese manufacturers with customers around the world. Just go to its site, Alibaba.com, and you can search for most anything. While this site is designed to help companies from around the world purchase and source their products in China, and for Chinese companies to find customers, other sites run by Alibaba connect retail customers to sources of products from China. All its sites combined list more than one billion products.
I’ve used Alibaba over the years to find companies to build products for U.S. startup companies I’ve worked with. The site, and others like it, makes it easier for U.S. companies to do business in China than in the U.S. because we have nothing similar.
China copied and has beaten us in developing a thriving manufacturing industry. Now they’re aiming to do the same with online commerce.