Alibaba Group Holding Ltd (NYSE:BABA) has generated an amount of $2 billion in sales for the first hour that it served buyers in an online annual shopping spree popularly known as “11.11 Shopping Festival”. According to the company, the first 18 minutes of the sales festival has seen half of the $2 billion coming in, which gives credence to the company’s claims that it is the world’s largest 24-hour online sale.
The “11.11 Shopping Festival”, also known as “Singles Day” in English, was created by Alibaba Group Holding Ltd (NYSE:BABA) way back in 2009. The sales event intends to be a kind of celebration for bachelors, and the date, November 11, with four 1’s in it, is taken as a symbol of being single. People are encouraged to buy gifts for the singles they know, and the sales holiday has spread speedily both in terms of people observing it and the places where it is practiced. It has also sustained a sales growth from $7 million in its first year to an estimated amount of $5.7 billion last year. For this year’s event, Alibaba expects to make an estimated amount of $8.2 billion in sales.
To promote the event as well as push sales, Alibaba Group Holding Ltd (NYSE:BABA) have been offering customers low prices on all available goods in its websites weeks before the final day on November 11. Customers were offered an option to buy the items they want at discounted prices by requiring them to make a small down payment, with the remaining balance to be paid on November 11. In effect, transactions several days before the sales festival were actually turned into transactions for that specific day. The result is an increase in the Gross Merchandise Volume, which indicates the amount of transactions that occurred in Alibaba Group Holding Ltd (NYSE:BABA)’s website.
The Chinese sales festival is now considered bigger and more profitable than the U.S.’ Black Fridays and Cyber Monday combined. Reflecting the company’s growth is the trend in its shares, which lately pulled up at 2.5% to $117.46. Its shares was initially priced $68 a unit in its initial public offering in September, and the current price represents a climb of about 73%.
This article has been written by Nonito Guntan.