Chinese E-Commerce Giant Alibaba’s Shopping Festival Breaks Online Sales Record.

Chinese E-Commerce Marketplace Alibaba Records $5.78 Billion in Sales, Topping Last Year’s Sales in Half a Day.

The country’s biggest online shopping day of the year, also the biggest on the planet, have set another record.

After only about half a day, Alibaba Group Holding Ltd. said sales on its online shopping sites had topped $3.1 billion – last year’s total for the one day 11.11 Shopping Festival.

The company recorded 35.19 billion yuan ($5.78 billion) in transactions by the end of the day. Chinese online shoppers spent more in 24 hours than the $2.5 billion that Americans spent online on Black Friday and Cyber Monday combined. This is a strong reminder of how lucrative the e-commerce market in China is, surpassing the US in terms of consumer numbers and total spending. In the first six minutes of the 11.11 shopping festival transactions exceeded an incredible one billion Yuan.

The Alibaba Nov. 11 sale is a tradition which started in 2009, when 27 merchants on the company’s Tmall site offered discounts to increase sales during a usually slow period. The concept was then subsequently developed and intelligently marketed alongside China’s ‘singles day’, a celebration of independence, now defined (in part) through one’s purchases at discounted prices.

This year’s sales record demonstrates the rising power of the Chinese consumer and the increasing presence of e-commerce in a country where the physical, retail infrastructure isn’t as well-developed as it is in the U.S. It also shows the rising power of Chinese brands, with smartphone maker Xiaomi Inc. and electronics and appliances supplier Haier Electronics Group Co among the top sellers.

In the opening three minutes, Xiaomi said it sold 110,000 of its new Mi 3 phone and another 110,000 of its Hongmi phone, totaling 178 million yuan in transactions. After half an hour, the company’s Tmall store had 300 million yuan in transactions. Chinese brands such as Xiaomi are flexing their muscles with sales figures such as this. This also demonstrates that China is no longer simply a factory for the rest of the world but a rapidly developing country that is modernizing at a head spinning pace. This whole venture was engineered and executed by a Chinese e-commerce firm with domestic, Chinese technology brands thriving.

As a direct result of such Chinese sales figures the number of expats and business people learning Mandarin is also dramatically increasing, an understanding of the language has become a pre-requisite to succeed in E-commerce here. Language specialists ‘Tailor Made Chinese’ have stressed that it is ‘vital for expats to learn and speak Chinese to succeed in business’.

Examples such as this reflect the vast potential for Western brands in China, for more information on marketing and expanding your business into China see Benji Lamb’s marketing website and blog.

3rd Party Brands Online is Almost Mission Impossible

The WSJ has another interesting piece on the hotly covered ecommerce startup Jet.com. If you’re selling third party brands online you’ll know this but if you’re thinking about it please read on:

Over the summer, the company said it would spend $100 million on ads in the first 12 months after the site opened. In the recent plan, that total had grown to nearly $300 million. The money is fueling television spots, subway posters and online ads—including nearly $10 million spent on Google in October, according to people familiar with the figure.

It takes $300 million to market a third party branded ecommerce website in 2015. Ouch.

Putting aside the fact Jet is a large, venture back outfit, the costs for any startup doing the same will still be very steep. This is what killed Webvan and caused the dotcom bubble. In essence, competition in ecommerce has the same economic factors as physical offline commerce. Sometimes people forget to be rational with customer acquisition.

So how do you compete other than paid media? One answer is social media aka word of mouth and arguably it’s is the best route to market today for online ecommerce startups. It’s also something Jet will be hoping to rely on in the future (as Amazon does) to avoid becoming another Webvan.

Often Overlooked But Massive: B2B Ecommerce

An article from WSJ highlighted the massive yet relatively overlooked world of B2B ecommerce. From the journal:

E-commerce sites that aim to help old-line industries find new customers, streamline sales and improve profit margins have proliferated and become among the hottest bets for venture-capital funds this year.

It’s important to remember that the world’s largest ecommerce company is not in fact Amazon or Ebay but Alibaba. Why is this important? Because Alibaba is largely B2B; connecting the myriad of Chinese manufacturers to the rest of the world has created a giant with a GMV of $250 billion in 2013.

Put simply, B2C is a big market but B2B is in another league. But that’s not all because B2B has been far less penetrated by ecommerce than B2C. By most estimates and unlike B2C, this is a market with lots of room to grow.

And here’s more reasons why it’s attractive to investors:

This is another reason that investors like these B2B e-commerce startups. Their spending on customer acquisition is only about 10% of that of e-commerce startups targeted at consumers, and their customers usually stick around.

Do you sell B2B? If not, why not?