China e-commerce giant Alibaba has set US$8.18 billion (RMB50 billion) as its 2014 target of single-day transaction value for the November 11 online shopping festival. IDC believes Alibaba is very likely to achieve 5% more. "11.11" is not only a festival for Alibaba, online shoppers, and online retailers; it also changes consumers' buying behavior and impacts the evolution of the China e-commerce ecosystem.
November 11, or simply "11.11", has become a special day for many Chinese consumers ever since Alibaba created this single-day online shopping festival in 2009. The total transaction value during last year's "11.11" reached US$5.73 billion (RMB35 billion), which shocked Alibaba's e-commerce competitors all around the world as well as the entire retail industry.
The performance of "11.11" this year will be of great importance to Alibaba as a newly listed company and to the future of the China e-commerce market as a whole. A sales miracle will definitely encourage Alibaba's investors and their business partners. Moreover, IDC believes that the business innovations supporting this festival are likely to point out the future evolution trends of the China e-commerce market.
Even though the transaction value for last five years has witnessed a stunning growth rate, Alibaba's chairman, Jack Ma is still ambitious enough to put Alibaba's "11.11" single-day sales target to RMB50 billion this year. IDC expects the final results to even overachieve this target by 5% to RMB52.85 billion, or US$8.65 billion.
IDC believes that mobility and online to offline (O2O), or the so-called omin-channel will be two important aspects of the changes in consumer behavior. The "11.11" online shopping festival in 2013 achieved 45 million payment transactions through the Alipay mobile app, which counted for 24% of Alibaba's total payment transactions and 32% of its total transaction value on that single day in 2013. This number is expected to be higher on "11.11" this year.
Mobility is so important that Alibaba needs to demonstrate its ability in mobile e-commerce at every opportunity. As one of its main competitors, Tencent (Wechat) occupies the dominant position in social networking and mobile IM in China, which has been imposing huge pressures on Alibaba's future development in mobile Internet.
Meanwhile, as O2O shopping has become the norm for consumers, new O2O models will emerge during the "11.11" shopping festival this year. For example, consumers can go to offline shops to get the goods they purchased online. Also, consumers in offline shops can get coupons for future shopping by scanning the QR codes on the packing bags. Aside from that, membership can be recognized in both online and offline shops.
IDC considers "11.11" online shopping festival originated by Alibaba as the experimental field for the China e-commerce market's innovations, which will mean much more than the sales record on that day. IDC suggests that companies in the e-commerce market should focus more on the changes in the e-commerce ecosystem and consumers' shopping behavior.
