China's 24-hour online shopping binge nears $16 bln

SHANGHAI - Chinese e-commerce giant Alibaba saw its Singles' Day sales hit $16 billion by mid-morning on Saturday after racing to a billion dollars in just two minutes after the world's biggest shopping spree opened at midnight.

Once a celebration for China's lonely hearts, Singles' Day has become an annual 24-hour extravaganza that exceeds the combined sales for Black Friday and Cyber Monday in the United States, and acts as a barometer for China's consumers.

After a star-studded event in Shanghai late Friday to ring in the event, the volume of goods sold on Alibaba's platforms hit $10 billion in just over an hour, and was already heading towards last year's total of $17.7 billion.

The event gets shoppers around China scouting for bargains and loading up their online shopping carts, while delivery men - and robots - are braced for an estimated 1.5 billion parcels expected over the next six days.

"This is a big event for China, for the Chinese economy," Joseph Tsai, Ali Baba's co-founder and vice chairman, said ahead of the sales bonanza. "On Singles' Day, shopping is a sport, it's entertainment."

Tsai said rising disposable incomes of China's "over 300 million middle-class consumers" was helping drive the company's online sales - and would continue. "This powerful group is propelling the consumption of China," he said.

Analysts and investors will closely watch the headline sales number, which looks likely to fly past last year's total. Spending rose by nearly a third at 2016's sale - the eighth iteration of the event - but that was slower than the 60 percent increase logged in 2015.

At Alibaba's Friday night gala, the company's co-founder and chairman, Jack Ma, hosted guests including the actress Nicole Kidman, singer Pharrell Williams and Chinese musicians and film stars such as Zhang Ziyi and Fan Bingbing.

SLOWER GROWTH?

The excitement around the shopping blitz, however, masks the challenges facing China's online retailers such as Alibaba and JD.com Inc, which are having to spend more to compete for shoppers in a broader economy where growth is slowing.

"A lot of the lower hanging fruit has been picked and there's increased competition for a share of consumer spending," said Matthew Crabbe, Asia Pacific research director at Mintel.

He estimated Alibaba's Singles' Day sales growth would likely slow to around 20 percent. Online retailers were being forced to push offline as well as overseas to attract new shoppers, and the overall online retail market was close to "saturation".

"They're having to spill over out of the purely online realm into the wider consumer market," Crabbe said.

This has sparked deals to buy bricks-and-mortar stores in China, and overseas tie-ups especially in Southeast Asia. Technology, too, has been key, with virtual reality dressing rooms and live fashion shows to attract shoppers to haute couture.

Ben Cavender, Shanghai-based principal at China Market Research Group, noted that brands were being more careful with the deals they have on offer this year to avoid "margins getting killed", and were often asking for deposits in advance.

In previous years, most prices were often halved.

"I think prices seem high and I'm totally lost as to the rules" about discounts, said Gao Wantong, 21, a student in Beijing.

Fu Wenyue, a 23-year-old dresser in Shanghai, said she had spent around 4,000 yuan ($600) on clothes, cosmetics and kitchen utensils in pre-event sales, transactions ahead of the day which officially only go through once midnight strikes.

"I've bought some stuff already, but I haven't finished shopping yet," she said.

source: news.abs-cbn.com

Ruble plunges but Russians are going on shopping spree

MOSCOW - Russians are feeling the pinch from the slumping ruble, but one somewhat paradoxical result has been to unleash a spending spree as consumers snap up electronics, furniture and cars before prices soar.

In general, Russians' spending power has gone down with the ruble -- which this week hit a record low against the dollar and has lost more than half of its value against the euro due to falling oil prices and Western sanctions over Ukraine. In addition, inflation is forecast to soon climb above 11 percent.

But for those with savings who were planning to buy big-ticket imported items, now is the time to hit the shops, before prices go up drastically to reflect the new cost of imports. And for Moscow's large stores and malls, it is boom time.

In an Ikea shop on a weekday afternoon, the section selling fitted kitchens -- the highest-priced items in the store -- was packed with customers. Ikea has announced that it will put up its prices for kitchens and other goods on December 18.

At a peak time for shopping ahead of the New Year, the country's main holiday, "the number of people in the stores has gone up also because of prices going up", the Swedish chain, which has annual turnover in Russia of more than one billion euros ($1.25 billion), said in a statement sent to AFP.

Ikea had previously promised to keep its prices the same for 2014, but the chain then explained it "could not be independent from external factors".

Apple in late November upped its prices in Russia by 20 percent, without warning, after its products had suddenly become cheaper than in Europe, an opportunity that some canny consumers spotted.

Interest rates have shot up from 5.5 percent at the beginning of this year to 10.5 percent on Thursday and then 17.5 percent on Tuesday, but the central bank has not been able to keep a ceiling on inflation nor a floor under the ruble.

Many Russians are experiencing deja vu -- they have lived through several serious economic crises in the last 25 years, when many saw their savings go up in smoke.

Rush to buy

Household electronics chain M.Video confirmed it had seen footfall rise in early December, partly because of a trend to start shopping earlier for New Year gifts, but also due to the ruble's plunge.

"Customers are trying to lock in the value of their ruble savings and invest them in electronics," said spokesman Anton Panteleyev.

When the chain held a "Black Friday" event in late November, sales went up sharply and the best-selling items included flat-screen televisions, washing machines and smart phones.

"People rushed to buy expensive things like plasma TVs, tablets, notebooks and so on, trying to save their rubles that are drastically losing their value," said Maria Vakatova from Watcom consultancy group, which tracks high-street trends.

The tactic of going shopping when the economic situation gets tough may distinguish Russia from the West, analysts said.

"In this way, Russia is different from developed countries... There, when a crisis begins, people immediately start saving," said Igor Nikolayev, head of the FBK Strategic Analysis Institute.

"In our country, when a crisis comes, it is accompanied by a steep loss of value of the national currency and people abruptly start spending and for a time this softens the situation somewhat."

Such behaviour is "rational: everyone understands perfectly well that prices are going to change," Nikolayev said.

The popular weekly Argumenty i Fakty recently advised its readers to buy electronics, cars, clothes, which are generally imported and therefore directly affected by the falling ruble.

The car market also experienced a boom, with sales of the main foreign makes sold in Russia soaring in November after having been in a deep rut for most of the year.

The Association of European Businesses, which logs car sales, said the retail demand was "extraordinary".

Economist Nikolayev forecast this consumer boom will last "another couple of months, until people have spent all the rubles they are ready to spend."

After that "the most difficult period begins," he said.

The Russian central bank warned Monday that the Russian economy could contract by nearly 5 percent in 2015 if global crude prices remain at their current levels, which would cut sharply into government spending in the highly oil-dependent country.

source: www.abs-cbnnews.com