China's singles are in love … with Alibaba

Staff of an e-commerce store prepare goods for Singles' Day Discounts on in Wenzhou, Zhejiang province of China.
Photographer | Collection | Getty Images

Alibaba's sales for Singles' Day, China's equivalent of Cyber Monday, passed the $9 billion mark late Tuesday, topping last year's record of around $5.9 billion.

The total, measured as gross merchandise volume, was announced via Alibaba's Twitter account, using the hashtag #1111sale. It said that 42.6 percent of sales were generated via mobile.

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Singles' Day—so named because the date Nov. 11 has four singles (11/11)—was started as an in-joke between university students, but has morphed into China's equivalent of Cyber Monday. Spurred by Alibaba and its network of online retailers, the day has grown from $7 million in sales in 2009 to over $5.7 billion last year for Jack Ma's company.

This year, Alibaba's sales are expected to be about 50 billion yuan ($8.17 billion), a 40 percent increase from last year, according to Ben Cavender, principal at China Market Research Group.

That compares with Alibaba's total revenue of 16.8 billion yuan just for the September quarter, while GMV for the China retail marketplace was at 556 billion yuan in the quarter.

For the first time, Alibaba is also looking to tap an international audience for the "double-11" sale, Deutsche Bank noted in a report last week.

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China's e-commerce market is something retailers have been rushing to tap, with e-tailing there growing at a 120 percent compound annual rate since 2003, according to a 2013 report from McKinsey.

Online shoppers in tier-four cities spent on average around 27 percent of their disposable income online, the report said.

Rural areas, however, have only about 9 percent e-commerce penetration, compared with around 34 percent for urban markets, according a Deutsche Bank report.

"[E-tailing] actually seems to spur incremental consumption in China, especially in lower tier cities where there is pent-up demand for choice in merchandise that physical retail stores have not yet managed to deliver," the McKinsey report said.