What Alibaba won't tell you about Singles' Day sales carnival

November 20, 2015 09:46
Vendors suffering from a wave of product returns after the Singles' Day order boom may find it hard to share Alibaba chief Jack Ma's excitement. Photo: internet

A few days after Alibaba proudly announced to the world that its Singles' Day sales hit a new record of over US$14 billion, there have been reports in mainland media that as many as 64 percent of those transactions have failed in effect, either due to order cancellations or product returns.

While we can't say whether the reports are true or if they are smear campaigns against Alibaba, it is commonly believed that almost all e-shopping platforms experienced similar problems. It is only that Alibaba appeared to have been hit the most.

There are many reasons behind the high failure rate. Some customers returned the goods because they were not happy with the quality, which in many cases meant they got counterfeit products.

Some people revoked the transactions because they didn't get the delivery within the timeframe promised. This is not hard to understand given the huge transaction volume on a single day.

Buyers would have also walked away if they discovered that the so-called special offers on the Singles' Day -- November 11 -- were actually not so special at all. A Lot of buyers were drawn to the sales festival for extra low prices offered on that day.

Instead of feasting on the sales carnival, vendors may actually end up with losses if the additional income was not enough to cover extra costs (like courier and packaging) related to returned goods.

There is also the possibility of fake transactions artificially boosting the sales volume.

Chinese consumers tend to go to popular e-shops when prices and products are comparable. Some vendors deploy ghost buyers to stage fake transactions and post positive comments in the review sections.

Such practices could worsen on Singles' Day. Alibaba's computer system may find it hard to detect, or in some cases, the company may prefer not to spoil the party by looking deeply into the transactions.

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EJ Insight writer