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Alibaba's Singles Day sales top $74 billion

Deborah Weinswig, Coresight Research Founder & CEO, joined Yahoo Finance to discuss the biggest takeaways from Alibaba's Singles Day and what it signals for the retail sector.

Video Transcript

ADAM SHAPIRO: Let's take a look what's happening with shares of Alibaba. So they're off right now about half a percent. But the big news today was the $74 billion in sales during Singles Day, which is actually Single Days plural because it was November 1st through midnight on the 12th, China time.

Let's discuss what this means and what it means for actually, you know, the United States as well, because there is a component here that we need to address. And we're going to do that with Deborah Weinswig. She is Coresight Research founder and CEO. It's good to have you here. And what is your takeaway? Because are you surprised that shares, at least here in the States, are trading down a bit?

DEBORAH WEINSWIG: I'm certainly surprised because, you know, while we had high expectations, I don't think anyone was thinking $74.1 billion, certainly not $5.3 billion of that driven from the US. And, you know, it's maybe everyone's kind of taking a moment and digesting. But it's everything we saw from Golden Week, right, which is the first week of October, certainly pointed kind of up and to the right. And that's definitely the path trend that we've continued to see.

SEANA SMITH: Deborah, how about the success that we've seen from the US brands? Because when you break out, they broke up the US sales for the first time this year. Above 5 billion was the last figure I saw. What message does this send to the US brands just in terms of their opportunity that's out in front of them in China?

DEBORAH WEINSWIG: The opportunity is significant. We saw some of the brands who've been considering to head to China realize they had a lot of excess inventory, kind of hopped onto the platform, let's call it May, June. And from day one, they were-- I think the strength of their sales was unexpected. And we saw many companies sell out.

And if you look at just the data, there are 342 brands that did over $100 million in GMV. And these included companies like Adidas, you know, Apple. I see a lot of L'Oreal, Lancome, and Nike. And right in the first 111 minutes, so let's call it two hours, they kind of hit these targets. We'll just call it $15 million. I mean, that's significant.

ADAM SHAPIRO: Significant, but you also-- I don't know if this is a warning or if this is a good sign. You point out the increased quality of apparel and footwear offered by Chinese mid-market brands is set to impact sales of global and US brands during Singles Day. Break that down for me. Are we losing our market?

DEBORAH WEINSWIG: We continue to see-- and I really-- you know, what keeps me up at night really is in the luxury side. Because we are starting to see local luxury brands. And that market has represented at least one-third, if not 50%, of many of the luxury brands' business. For many others, it is important but not quite at that level.

We are continuing to see, not only, I'd say, this discovery process through live streaming, right, for many consumers in kind of tier 1 cities to rural cities, but this idea that they are discovering brands. There are a lot of new brands. And, you know, there's a lot of noise. That's why, you know, Singles Day is really kind of a-- there's a lot more art in some ways than science around it. But it is very complicated to succeed. But we certainly have seen many brands do that.

SEANA SMITH: Deborah, going off of that, what are some of the things that the global brands fall short on? Because when we talk about-- you said that the Chinese market is so important. There's so much opportunity there. A lot of these global brands looking there. What are some of these brands doing wrong?

DEBORAH WEINSWIG: It isn't what you would think. Because it often is customer service and this idea, right, the Chinese customer is very discerning, very demanding, and this idea that there is any question or any issue with something you bought, they don't expect to get something on a phone or a live chat. And what we often see, right, is in the customer service associate perspective, they will have the item there handy, and they will be able to talk the customer off the ledge, if you will, and oftentimes, convert them into, right, a brand loyalist and almost an influencer for them.

I don't think here, in the west, we understand the level of importance of that. And I do think that there is an investment that's needed there. But also, there's a training aspect as well.

ADAM SHAPIRO: When we take a look at Alibaba's growth in China-- what is it-- 600 million people in the middle class, they haven't even begun to push the outer bounds of this. Do you have any projections?

DEBORAH WEINSWIG: Well, what I think was, to me, personally very interesting, if you look at the city tiers, the tier 1 cities and the rural were the strongest for double 11. And what we saw in the rural markets was around, you know, kind of smart products. And I think, you know, if you looked at, I think it was, like, sales of smart watches were up 144% year on year. You know, smart accessories up 128%. Electric toothbrushes, right, up 212%. So there are-- right? This is a very large market, increasingly sophisticated, tier 1 city versus rural. There's a lot of room for growth, exactly as you said, Adam.

SEANA SMITH: You know, in the past, brands have shied away from the Chinese market because of some of the counterfeit issues that we have all talked about in the past when it comes to China. How do you think US brands, or really, global brands, are thinking about this issue now?

DEBORAH WEINSWIG: You know, it's interesting. I mean, the AFA, right, the American [INAUDIBLE] Association has certainly stepped up, I think to educate everyone globally around, you know, the challenges. But ultimately, I do think that because of so much of what we're seeing right now, which is these brand mashups, limited time, limited quantity, limited offer, this-- like, with Singles Day, what makes it so special is, right, these items are, for the most part, they're kind of once and done.

I mean, you have so much of that, right? The opportunity for other challenges to grow in the market don't exist like they used to. And so, I think we're seeing the brands themselves try and figure out the path forward. So those challenges aren't ones that limit their growth in the future.

ADAM SHAPIRO: And what are you looking for? I mean, what's the next big thing for them? Is it next year's Golden Day? Or is it-- I mean, Singles Day this time around is 12 days long.

DEBORAH WEINSWIG: So some of the things that you-- well, and yeah, so Singles Day is important, right? Not only for Alibaba, but for JD.com as well. So JD did 40.9 billion, so you're talking just two, right? There's many more platforms did $115 billion in sales. So this is important. But what many people don't know, right, there's 12/12, right? That's kind of the follow-up to double 11.

And then they make a huge deal out of International Women's Day. And they have six Valentine's Days. So we're always celebrating. There's always a festival. And the technology continues to-- can elevate to kind of shop with your friends to celebrate, to just have fun, right, for no reason. It's just to have fun, right? That's all that it is.

And we continue to see a lot of these festivals, I would say, getting louder, more technologically proficient. And, you know, I think that we're-- you know, I expect this year's International Women's Day, which is, once again, March 8th, to be at least up 100% year on year because of what we're seeing in the beauty market and the CBD market.