Alibaba Misses Singles' Day Boom Amid Supply Chain Crisis

'Record High' 100 Trillion Sales Revenue
Sales Growth Rate One-Tenth of Last Year

Impact of Power Shortage, Supply Chain, Semiconductor Shortage
"US Black Friday and European Year-End Peak Preview"

[Asia Economy Reporter Cho Hyun-ui] Alibaba, China's largest online shopping mall operator, has reportedly failed to fully capitalize on the Singles' Day sales boom this year due to the global supply chain bottlenecks and other aftereffects. The year-end shopping seasons in the US and Europe are also expected to be affected by supply chain issues and inflation driven by raw material costs.

According to the Hong Kong South China Morning Post (SCMP) on the 12th, Alibaba recorded sales of $84.5 billion (99.96 trillion KRW) during the 11-day Singles' Day event period.

Despite achieving an all-time high sales figure close to 100 trillion KRW, Alibaba could not celebrate because the sales growth rate hit the lowest level since 2009.

Alibaba's Singles' Day sales have rapidly grown each year, recording $24.2 billion in 2017, $30.7 billion in 2018, $38 billion in 2019, and $77.8 billion in 2020.

In contrast, this year's sales growth rate was 8.4% compared to last year, a sharp drop to about one-tenth of the previous year's 85.6%. This is the first time Alibaba's Singles' Day sales growth rate has fallen to single digits since the first event in 2009.

Alibaba's poor performance is attributed to a combination of domestic power shortages in China, global supply chain breakdowns, and semiconductor shortages. The Wall Street Journal (WSJ) reported, "In some regions, factories have halted or delayed production due to power shortages," adding that "this has led to price increases."

Electronics, a popular shopping category during Singles' Day, are in short supply due to semiconductor shortages. Additionally, the global logistics crisis has delayed the supply of imported products.

Sellers, struggling to maintain inventory amid supply chain disruptions, are debating whether to continue sales at high discount rates or focus on profit generation. WSJ noted, "Some sellers continue sales with discounts despite rising costs, while others reduce discount rates and cut online advertising to maintain profit margins."

As the year-end shopping season approaches worldwide, the sluggish Singles' Day sales caused by product shortages at Alibaba have raised warnings that this could be a preview of the US Black Friday and Europe's Christmas shopping seasons.

A global supply chain expert in the US told economic media CNBC, "Buy today even if you have to return it later," adding, "It won't be on the shelves tomorrow." He warned, "If you are preparing for year-end shopping, you need to be aware that popular items may not have sufficient stock."

Major US retailers, which generate 20% of their annual sales during Black Friday, have already started their events early. Amazon began its 'Black Friday Deals' promotions on the 4th of last month, and Target and Best Buy have also joined the lineup. WSJ reported, "US sellers have already advised customers to order items as soon as possible."

Price increases due to inflation are also a factor that could cause sluggish sales. Bloomberg reported, "Due to rising prices, year-end shopping plans appear to be slightly more cautious than last year," noting that "the average planned spending for year-end shopping this year is $648, down from $673 last year."

According to US media reports, the price of Christmas trees has risen by at least 10% this year. Toy prices were already increased by 5-10% or more in early last month. Beef and pork served at year-end tables have risen by 18% and 13%, respectively.

This content was produced with the assistance of AI translation services.