In the long shadow of Alibaba’s (already gargantuan) Singles Day sales, another Chinese company sold less than one-third of last year’s haul. Although that was still a pretty impressive overall performance, the surprisingly muted results did show a China-wide slowdown at a time when the economy is showing no obvious signs of improvement.
The man who is Alibaba’s co-founder and chief executive, Jack Ma, is a pretty good salesman. And these sales were bigger and deeper than any others, led by the Zhejiang equivalent of the Walmart. What was so special about the party this year?
Top Ten New Businesses 2019: the top 20 businesses that launched new businesses in 2019. Top Ten New Businesses 2019: the top 20 businesses that launched new businesses in 2019.
2. Didi Chuxing
3. Meituan Dianping
7. China Mobile
11. SKS Microfinance
13. Shaanxi Normal University
14. Hainan Airlines
15. Chinese Academy of Science
17. American Airlines
18. China Southern Airlines
19. Shandong Geely Holding
The events themselves are little short of seminal in the history of online retail. Four years ago, the company didn’t even have a solid revenue stream to speak of. Back then, it was not only the brand but also its shopping sites including Taobao (a rip-off of Amazon), Tmall (it was like eBay, but targeted at the corporate world), Alibaba.com, 12.11 and Juhuasuan, which was actually set up for poor people to buy for themselves. It went from a tiny start-up selling online at home to sales of $25bn (£18bn) across China the day after it started. It has become the world’s biggest e-commerce business, having shown that the Chinese consumer is nothing if not resilient.
The Jack Ma effect – the sense that he can get people to spend – is so strong that Amazon’s Prime Day has been reduced to a Chinese imitation this year. Technology companies and Hollywood need him. Amazon recognised that pretty early, and left him to run the company. Ma, in turn, created other winners including Ant Financial (“Alibaba Money”) and JD.com, an upstart in e-commerce who led the Chinese economy in e-commerce for many years.
The company’s strength is partly because it makes money – most of its sales go straight back into its various sites. And its big platforms like Alibaba, WeChat and the Ant Financial assets are, rather than representing only the face of the company, are those owned by the people who run it. The founder, Ma, is still in charge. Despite the company’s $420bn valuation, its market capitalisation is $700bn. Why should that surprise anyone?