Alibaba’s Singles Day Sales Reporting Seems to Be Highly Misleading
On Sunday, Chinese mega retailer Alibaba hosted its 10th annual Singles Day sale, which racked up a record $30.8 billion in sales in just 24 hours, according to CNBC. That figure was up some 27 percent over the $25.3 billion the sale brought in last year. To put that in perspective, the single-day record for sales for our own country’s online retailing giant was roughly $4 billion this past July on Amazon Prime Day. So, on the surface, you could say that Singles Day is roughly seven times as big as our own Prime Day here in the States.
By the same token, the upcoming Black Friday holiday shopping weekend is expected to bring in some $14 billion in online sales for more than 4,500 U.S. retail outlets. So, again, in theory that would make Singles Day more than twice as large as the four day shopping event here in the U.S. that helps to drive more than half of all retail sales.
If that sounds highly questionable, you’d be right to think so—at least according to analysis by Bloomberg of the shopping event. The business publication posits that investors would be wise to not get caught up in the hypes of Singles Day, mainly because of the financial metric that the company uses to report its results. Gross Merchandise Revenue, or GMV, is widely considered to be a meaningless statistic when it comes to overall revenue. In fact, as Bloomberg uncovered a year and a half ago, GMV has essentially no correlation with the retailer’s revenue performance.