Alibaba Singles Day sale transactions surpass $13.6 billion with 9 hours to go

Image Credits: Reuters

  11 Nov 2016 , 16:05

Alibaba Group Holding Ltd’s Singles’ Day sales surged past last year’s 91.2 billion yuan ($13.36 billion) total with nearly nine hours left on the clock, but growth was markedly slower than in 2015 as shoppers sought even bigger price cuts.

Amid fanfare and celebrity razzmatazz, sales on Alibaba’s platforms had raced to a billion dollars in under five minutes and within the first sixty minutes had passed $5 billion – a third faster than 2015 as the e-commerce giant looked to shrug off a domestic economic slowdown and a U.S. accounting probe.

The 24-hour event held annually on Nov. 11 offers a benchmark for Alibaba’s performance and an insight into China’s swing to online shopping, especially via smartphones. Launched in 2009, Alibaba’s version of the event was designed to encourage consumers without a partner to treat themselves.

The discount shopping day, also known as “Double 11”, still shifts more goods than Black Friday and Cyber Monday in the United States combined. Sales on Alibaba platforms, including Tmall and Taobao, are tipped to exceed $20 billion this year.

“Back in 2013, 35 billion yuan ($5.14 billion) was our one-day GMV (gross merchandise volume),” said Chief Executive Officer Daniel Zhang in a live microblog posting on Alibaba’s event. “Now we can achieve it in one hour.”

GMV refers to the value of goods sold by vendors through Alibaba’s platforms. Alibaba makes money through advertising and charging vendors a proportion of their sales.

Mobile shopping surge

After a beefed-up marketing push over the last month – with fashion shows and virtual reality games – sales officially opened at midnight, releasing a wave of pre-orders that shoppers had placed ahead of the event. Sports stars David Beckham and Kobe Bryant attended the countdown, though headline act Katy Perry pulled out last minute citing a “family” issue.

At 1519 p.m. (0719 GMT) a live sales tracker at Alibaba’s main event in the southern Chinese city of Shenzhen passed the 2015 yuan total, ensuring the day will set a new record but, in dollar terms, was still short of 2015’s $14.3 billion.

The rise of Singles’ Day reflects how China’s consumers, armed with smartphones, are racing online to shop – to the detriment of bricks and mortar stores. So far on Friday, 83 percent of sales were via mobile devices, up strongly from last year, Alibaba said.

The day itself is a double-edged sword for many: Couriers, packaging firms and vendors say low prices and steep competition mean profit margins are slim despite large sales volumes. Cut-throat competition for customers has also caused concern over false advertising and massaged statistics. This week China’s business regulator advised mainland online shopping platforms to guard against suspect sales tactics.

In May this year, Alibaba said the U.S. Securities and Exchange Commission (SEC) was looking into how it reports its Single’s Day figures. Alibaba said at the time it was cooperating with the authorities, and that the SEC advised it the investigation should not be seen as an indication the company had violated federal securities laws.

Alibaba declined to comment on the SEC probe on Friday. Alibaba is not the only retailer to mark Nov. 11 with a massive sales drive. China’s no. 2 e-commerce player JD.com Inc and many others also offer discount deals on the day.

Reuters

Banks uses blockchain to the make first cross-border international trade transaction

Image Credit: Commonwealth Bank of Australia

  24 Oct 2016 , 15:48

The first cross-border transaction between banks using multiple blockchain applications has taken place, Commonwealth Bank of Australia and Wells Fargo & Co said on Monday, resulting in a shipment of cotton to China from the United States. Australian cotton trader Brighann Cotton Marketing bought the shipment bound for the port city Qingdao from U.S. division Brighann Cotton in Texas, the companies and their banks said in a joint statement. The blockchain trade, for 88 bales, totalled $35,000, Commonwealth Bank told Reuters.

Blockchain is a web-based transaction processing and settlement system whose efficiency banks say could slash costs. It creates a “golden record” of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification. “Existing trade finance processes are ripe for disruption, and this proof of concept demonstrates how companies around the world could benefit from these emerging technologies,” Michael Eidel, Commonwealth Bank’s executive general manager for cash flow and transaction services, said in the statement.

The transaction is not the first involving the decentralised database, used since 2009 for the digital currency bitcoin. But it is a milestone for the traditional banking industry which at first shied away from the technology, partly because it makes money flows harder for law enforcement agencies to track.

Led by a consortium of over 70 of the world’s biggest financial institutions – called R3 – the banking industry has been researching ways to harness the speed, accuracy and efficiency afforded by blockchain. One of its benefits is removing people from transaction processing. That has been seen as especially appealing for cross-border trades, which are typically held up by duplication of payment processing and time zone differences.

R3 has been researching ways to expand the use of blockchain to include “smart contracts”, or payments triggered when certain conditions are met. The cotton transaction, for instance, involved automatically making payments when the shipment reached certain geographic locations, the statement showed. The shipment is currently between Singapore and Hong Kong, and is due to arrive in early November, Commonwealth Bank said. The bank also said that R3 – of which it and Wells Fargo are members – did not play a part in the trade.

Brighann Cotton was not available for comment when contacted by Reuters. Wells Fargo’s head of international trade services, Chris Lewis, said in the statement that his bank was committed to new technology. He also said, “significant regulatory, legal and other concerns remain to  be addressed.”

Reuters