Reporting From Double 11: 168.2 Billion Yuan in a Day, and More of Alibaba's "New Retail" Story

In its second Double 11 since announcing it would stop emphasizing gross merchandise volume, Alibaba has started telling New Retail stories.

In 20 minutes, Jack Ma played out the standard plot of a martial-arts novel: a crushing defeat, then enlightenment into a peerless kung fu, then a run of victories over masters including Wu Jing, Donnie Yen, Jet Li and Tony Jaa.

That short film, Gong Shou Dao, a formula plot mixed with product placement for Mengniu, was the climax of the Double 11 gala — not only because of Jack Ma and the cast of stars, but because it was already 11:38 pm and the Double 11 buying rush was about to start.

At the same time, the mood in the media center at the Shanghai World Expo Center was tightening. Every year, what matters most comes after midnight.

Herding hundreds of media outlets into one room to watch sales figures climb on a giant screen, record after record, has become an Alibaba tradition every Double 11.

Last year, the big screen with its ticking transaction numbers broke record after record — 100 million yuan, then 500 million, 1 billion, even 10 billion, in a matter of minutes and seconds. At 1 am came the top 10 brands by single-store sales, and the host's commentary kept being cut off by celebratory effects flashing across the screen.

Double 11's frenzied numbers have always carried the job of lifting revenue and lifting the share price. But last year, an hour after midnight, the 35.3 billion yuan in combined sales across Alibaba's e-commerce platforms did nothing for the stock that day. When U.S. markets closed the next day, Alibaba's market value had shrunk by about $10 billion.

This year, the tradition changed a little.

After midnight the numbers on the big screen still ticked, and faster than last year. But the host no longer cheered each milestone, and the media center was much quieter.

In the half hour after midnight, the ticking numbers were off the screen two-thirds of the time. The big screen showed a record-breaking graphic only once: at 3 minutes and 1 second past midnight, when total sales crossed 10 billion yuan.

In its place was a live heat map of transactions across Shanghai — Alibaba's new story: New Retail.

Alibaba's offline fresh grocery chain, Freshippo, had each of its stores marked on the map with a bright yellow logo. Circles kept spreading outward from every logo, and the host explained that these were the delivery radius of each Freshippo store.

In its second Double 11 since announcing in the middle of last year that it would stop emphasizing GMV (gross merchandise volume), Alibaba began playing down a number it had talked up for more than a decade.

The gala ran longer than last year, and the ads felt more natural

The red envelope that had hung on Tmall and Taobao for 21 days, with its complicated rules, was finally opened at 7:50 pm on November 10.

As host Hua Shao rattled off a long string of numbers, a torch-shaped red envelope worth 250 million yuan in total was "lit up" more than 300 million times.

That figure never even appeared on screen. Viewers in front of a television or a phone could shake their Taobao app to see how much of the money they had got; most people came away with a few jiao, small change.

Across 260 minutes of gala, the hosts kept telling viewers to open Taobao and shake their phones. Stars had been flown in from China and abroad and the title sponsorship had been sold openly, yet the theme was still "Happy Double 11," and the show's real job was to warm the audience up for the sale that would begin a few hours later.

When a shopping promotion reaches 300 million people, it is hard to come up with a number that still surprises anyone. But Alibaba still has to make the world's biggest shopping festival bigger.

Outside interest has not faded either — beyond the 300 million participants, there is more attention from abroad than ever. Last year, foreign media waited for the first-hour numbers, or for the end of the gala and the news that Katy Perry had not turned up, before filing their Double 11 stories. This year they came earlier: Bloomberg, The Guardian, Fortune and the BBC all ran warm-up pieces well in advance.

This year Alibaba brought in more celebrities. In the gala's first hour, Zhang Ziyi and World Player of the Year Luís Figo had already been on stage, representing the diaper brand Piaopiao Yumao and the shampoo brand Head & Shoulders. After them came Karen Mok, Lang Lang, Kris Wu, Li Yuchun, Nicole Kidman, Victoria's Secret models Sui He and Lias, the tennis player Maria Sharapova and others.

The first round of the "cross-screen star grab" started at 8:03 pm. The Double 11 Tmall Genie robot also made its first appearance; viewers could open the Taobao or Tmall app on their phones and shake to join in.

Every exchange between the celebrities and the hosts was, one way or another, a reminder to get ready to shop.

This year's format inventions were mainly the "cross-screen star grab" and sending a celebrity to your home.

A teleportation device was set up on stage. Once a guest "teleported" the first gift onto viewers' phone screens, the audience could compete for a chance to buy it for one yuan. Those who missed out — you and me, of course — usually got a coupon instead, 20 yuan to spend at a brand's flagship store.

At last year's Double 11 gala, Alibaba tried augmented reality. During the broadcast, Lin Chi-ling took off the trench coat she was wearing and threw it at the camera. The coat seemed to pass through the television screen and land on the phone in the viewer's hand. This year the trick went further: viewers watching the broadcast could "invite" a celebrity out of the television and into their own home for a "photo together."

It happened twice over the course of the night. The actresses Lu Jingshan and Fan Bingbing each "crossed over" from the stage to the big screen, which was showing the audience members' own living rooms. Judging by the result, it worked fairly well.

After last year's gala, Po Tian, the head of the production team, said the number that mattered most was the interaction count. Whether it is the star-gift grab or shake-your-phone, everything requires you to keep tapping — that is where the gala team's targets begin.

Gong Shou Dao, the short film starring Jack Ma, was the gala's last item, and its makers and co-stars Wu Jing, Jet Li and Donnie Yen came to the venue with him. By the halfway point, the hosts sounded less enthusiastic about telling viewers to shake their Taobao app, but another app's presence never let up.

Huoshan Video turned up several times in the video ads between segments, and the hosts kept telling viewers to download it. "New users get red envelopes for posting videos and for watching them" and "Huoshan Video has serious money to hand out" were lines they repeated again and again.

A New Retail experience zone at the venue: Freshippo, AR and more

In the New Retail experience space outside the media center, four hours after it opened to visitors, people were still coming and going and fiddling with the equipment on display. Last year the zone was all but empty.

Marie Dalgar had put a lipstick vending machine in the zone. You scanned the shop's QR code with Taobao, followed the store, qualified to buy and paid, and a lipstick in a random shade dropped out of the slot.

The Tmall Magic Mirror was an interactive AR screen that let users see a makeup look on themselves in real time — this Double 11, shoppers could find similar machines in some physical stores as well.

Freshippo brought its facial-recognition self-checkout machines to the venue. Staff told us that after Double 11 every Freshippo store in Shanghai would take facial-recognition payment, while the Beijing stores would not be upgraded until December.

Once the gala passed its midpoint, the Freshippo stand was the busiest one there. It needed little explaining — most visitors already knew Freshippo well, so staff only had to walk customers through the new facial-recognition payment and the account-linking process.

At the Freshippo stand you could buy crayfish mooncakes, hydroponic vegetables and young Thai coconuts. Because coconuts drew the most orders at once, one staff member picked up a simple coconut opener and a hammer and cracked more than twenty of them without stopping. "We didn't see this coming, and it's the first time we've run into it, because in the [Freshippo] stores we use a dedicated machine to open them."

Alibaba gave about 50 square meters of the zone to Scenario Shopping. Staff said this was part of Alibaba's New Retail, and it was the only stand in the whole zone that brought up New Retail unprompted.

"The way goods are displayed on shelves today doesn't do enough to carry the setting. Scenario Shopping is an attempt to improve that and fill the gap. It is the connecting point through which New Retail will move offline in the future," Zhang Jun, product operations lead for Scenario Shopping, told QDaily.

The space held sofas, tables and chairs, lamps and other home furnishings; shoppers scanned a code with Taobao to enter a panoramic view. Visitors had to scan the QR code inside the zone with the Taobao app, which then jumped to the Scenario Shopping interface.

Alibaba imagines it working like this: a user browsing furniture on Taobao uses a 360-degree panorama to see what a piece would look like in their own room, without going to a store.

Plenty of physical stores joined Double 11 too — but they no longer funnel sales online

New Retail has been discussed outside Double 11 for a long time. More than a year ago, Jack Ma first put the term forward at Alibaba's Yunqi Conference, and ever since, every public account Alibaba gives of its business has revolved around this ever-broader word.

In February, Alibaba struck a strategic partnership with Bailian Group. In July, its fresh grocery chain Freshippo opened three new stores in Beijing and Shanghai. Soon after, the first Tmall Convenience Store, a neighborhood shop converted into the new offline format, opened in Hangzhou, and by the end of September there were 500,000 Tmall Convenience Stores across the country.

To prepare for Double 11, Alibaba worked with brands including Chow Tai Fook, Disney and Mark Fairwhale to open 60 pop-up stores in the main shopping districts of Beijing, Shanghai, Hangzhou, Guangzhou and Shenzhen. Shanghai, this year's main stage, got 21 of them — from Nanjing Road East and Huaihai Road Middle to Pudong and the area around Zhongshan Park, nearly every big mall had a pop-up store from a different brand.

The one fixture in every pop-up store was an interactive big screen where the brand showed a selection of its bestsellers. Passersby could scan a code to drop items into their cart, or play games on the screen to win coupons — to be used, of course, when paying for orders at those brands' Tmall stores. If shoppers were unsure about a product, there were matching counters in the mall where they could handle it in person.

On the afternoon of the 10th, we walked the main shopping districts of Beijing and Shanghai. Not many brands had begun their Double 11 promotions; most would not start until the 11th. Uniqlo had already set up a coupon screen at its entrance, playing on a loop: "A hundred selected items, same price online and in store."

Compared with earlier years, when customers in a store were pushed to scan a QR code and finish the purchase online, the in-store experience this Double 11 was much smoother. In a Suning.com store papered with O2O shopping-festival posters, the QR codes beside the price tags now said "scan for reviews," and a salesperson said, "We're fine with you comparing prices online, but buying here is definitely still the better deal."

At the Luolai Home Textiles counter there were cards printed with the Double 11 logo showing each item's promotional price on Tmall. The salesperson made a point of telling us: "Whatever's online, our store matches it — online and offline are the same price. But if you buy online right now, it may not be in stock."

Physical stores are no longer funneling traffic online.

The Double 11 warm-up also included golden cats released in malls at set times each day: during certain windows, users could head out to a mall and play a catch-the-cat game much like Pokémon Go to win large red envelopes.

The doorways of some brand stores partnered with Tmall became, according to the official guide, the easiest places to catch a cat and win a reward.

After midnight, the first wave of numbers arrived — but the venue no longer played them up

"We've spent all night shaking our phones, all night waiting for Gong Shou Dao. Now it's time to shop." After reading out the sponsor list, Hua Shao summed up the gala in a sentence.

The big screen in the media center cut the television feed and went back to the "Tmall Double 11 Global Shopping Festival" backdrop. The room began waiting for the video links with company executives.

The host announced nothing, but the reporters started to tense up anyway. The photography area filled in. As always, this was the most important moment of any Double 11: watching the numbers roll.

At 11:53 pm, an aerial shot swept over Alibaba's headquarters, the Xixi Campus in Hangzhou. Alibaba CEO Daniel Zhang and members of the core team appeared on the big screen, linked to the media center.

Seven minutes to go, three minutes, less than two — the gaps in the host's countdown kept shrinking.

"We've actually spent a year preparing for this moment. Every merchant has spent a year preparing too, and consumers have stayed up to midnight waiting for it," Daniel Zhang said.

The Alibaba employees behind him stood up. "10, 9, 8, 7, 6, 5, 4, 3, 2, 1!" Zhang counted down, the clock struck midnight, and Double 11 had officially arrived.

"We're back to this transaction screen we all know so well," the host said. On the media center's big screen, the numbers began racing upward.

In less than two minutes they had passed 6.3 billion yuan.

At 3 minutes and 1 second, sales passed 10 billion yuan; at 40 minutes, 50 billion yuan; at 1 hour, 6 minutes and 9 seconds, they passed $10 billion. By these numbers alone, this year's Double 11 was climbing faster than last year's.

But by now that was no longer what mattered most in the room. In the first hour last year, the host's commentary was repeatedly interrupted by the system's built-in fireworks. This year the milestones slipped past quietly, and the counter did not stop for them.

Before midnight, the word GMV came up exactly twice at the Double 11 venue: once before the gala began and once two-thirds of the way through, when the media center's host told the reporters to scan the QR codes on the side screens with DingTalk and guess Tmall's total GMV. Guessing closed at midnight on the 11th.

The staff handling media relations still tallied plenty of milestones like the 10-billion-yuan mark, but they made no point of them. They handed over the figures only if a reporter asked.

For nearly twenty minutes of that first hour the ticking sales numbers vanished from the screen altogether, while the host went carefully through New Retail in Shanghai, Zhejiang and Guangzhou.

New Retail was given real weight on stage for the first time that night. In the transaction heat shown for Shanghai residents, what stood out most was Alibaba's fresh grocery chain, Freshippo. After going through Shanghai's share of Alibaba's super-members nationwide and the popular consumer brands of past Double 11s, the host had staff pull up data and project consumption heat maps of Zhejiang, Guangdong and Guizhou on the big screen.

Over the next twenty-four hours this screen would also show, at intervals, consumption analysis for provinces and regions across the country, brand rankings by category and other New Retail data.

The first hour was calmer than in past years

Just after 1 am, the media center linked up with Alibaba's Hangzhou headquarters again, and Daniel Zhang came back on the big screen.

"The war room was actually very calm. The core tech team next door was on alert too, but in fact we got through the opening peak very calmly," Zhang said.

"If you're a compulsive shopper you should have felt it — payment right after the opening this year should have been smooth as silk." In Double 11's first hour, Zhang said, Tmall's peak transaction rate reached 325,000 orders per second and its peak payment rate 256,000 per second, 2.1 times last year's.

At the start of the second hour, buyers began paying the balance on goods that had been on presale for twenty days. As people drifted out, the buzz in the media center faded.

The numbers on screen kept moving, but hardly anyone still seemed to care when they passed $10 billion, or 70 billion yuan, or 80 billion yuan.

Update, 11:00 am, November 11

Four seconds past 9 am, Double 11's total sales passed 100 billion yuan, and the media center's big screen ran a celebratory effect for the third time, freezing the figure in the middle of the frame. For comparison, last year's Double 11 total was 120.7 billion yuan; there was little suspense about this year's passing it.

At 10:54:26, Alibaba announced that total sales had passed 111.1 billion yuan. The top three provinces and cities by amount spent were Guangdong, Zhejiang and Jiangsu. The top merchants by total sales were Apple, Midea and Xiaomi. This year even the iPhone X was discounted: 8,388 yuan list price, 8,387 after the cut, a generous 1 yuan off.

Several other large Chinese e-commerce platforms also released Double 11 figures. JD.com had been running its Global Good Things Festival since the 1st of the month; by 7:46:58 am on November 11, the cumulative value of orders placed by users had passed 100 billion yuan. Both "order value" and "sales" include a large number of orders that have been placed but not paid for.

Suning's Double 11 sales passed 100 million yuan in 7 seconds; Suning's overseas shopping arm passed last year's full-day total 58 minutes after midnight. NetEase Kaola's cross-border site beat its full-day total from last year 28 minutes in.

Update, 1:30 pm: Double 11 sales have passed last year's full-day total of 120.7 billion yuan

At 1:09:49 pm on November 11, sales at the 2017 Tmall Double 11 Global Shopping Festival passed 120.7 billion yuan, beating last year's full-day Double 11 total.

On the big screen in the temporarily closed-off media center, the special-effects graphic appeared for the fourth time — fewer times than it had appeared in the first 15 minutes last year.

The total was climbing faster than last year; that was one of the most immediate impressions. This morning Tmall announced that nine hours in, Double 11 sales had passed 100 billion yuan.

Update, 4:00 pm: Alibaba and JD.com are arguing about the numbers

At JD.com's headquarters in Yizhuang, Beijing, this year's Double 11 also had a big screen with sales figures ticking upward. It was the second time JD had done this; the first was five months earlier, on 618, its most important promotion of the year.

The numbers on JD's screen started counting from midnight on November 1, the opening of this year's 11.11 Global Good Things Festival.

"I have to admit JD is good at math," said Wang Shuai, chairman of Alibaba Group's marketing and public relations committee, when asked at a Qianniu livestream on the morning of November 11 what he made of JD's announcement that order value over its 11-day Double 11 had reached 100 billion yuan.

Wang added: "If JD wants to, it can count a whole year of order value as the total for one long year-spanning Double 11. There's nothing wrong with making yourself happy — that way Tmall's one day of sales certainly can't beat JD's year."

JD Group CMO Xu Lei then answered on WeChat Moments: "Why is it fine for Alibaba to run presales for more than 20 days and then count the first day of selling as its number, but not fine for JD to count 11 days of an ordinary shopping season with its doors open? This isn't a math problem, it's a logic problem. Alibaba has the ability to keep merchants' doors open for more than 20 days without doing business; JD only has the ability to do business well for 11 days."

Update, 4:00 pm: the fresh grocery chain Freshippo releases numbers too

After a video about "Freshippo-district housing," the chain's founder and CEO Hou Yi came on stage. His speech ran only seven minutes, but it was the first time Freshippo had disclosed its data in full.

"Our sales per square meter are already far beyond any supermarket's," Hou said.

Since the start of this year, sales through the Freshippo app have exceeded sales at the physical checkout counters — although Freshippo stores do keep staffed lanes for cash and cards, the great majority of customers are steered toward paying through the app.

The blue line for online order growth also rises far more steeply than the offline one. Online orders now account for 70% of Freshippo's total, which means 70% of orders are delivery orders placed by customers through the mobile app.

Freshippo delivers within three kilometers in 30 minutes. "The essence of New Retail is still something the mobile internet brought about," Hou said.

Hou also compared Freshippo's three-month single-store retention rate with e-commerce: Freshippo holds steady between 50% and 60%. "For a typical e-commerce platform it's 10% after three months."

Update, 6:00 pm: overseas consumers join Double 11

Dai Shan, president of Alibaba Group's B2B business unit, appeared on the video link to talk about Rural Taobao and AliExpress.

AliExpress, which sells to consumers abroad, started its Double 11 at 4 pm today — midnight on the 11th, U.S. time.

On Apple's U.S. App Store, we noticed the Today tab was featuring the AliExpress app. But like nearly all foreign media, the App Store called it Singles Day rather than Double 11, the term Alibaba has used widely this year.

Update, 9:10 pm: Cainiao's president on how busy Double 11 logistics are

With four or five hours left before Double 11 ended, the reporters in the media center were flagging. Some were playing Honor of Kings, some browsing Taobao, some catching up on sleep.

Cainiao president Wan Lin took the stage at 8:33 pm carrying a parcel, an order one of the reporters in the room had placed at Tmall Supermarket that morning. After his turn as a courier, Wan went through Cainiao's operating numbers. Some reporters put down their phones, picked up their cameras and walked to the front to photograph the images on screen.

This chart was Cainiao's forecast of how heavy logistics would be over the next 24 hours: red the heaviest, then yellow, then green. Right now the Jiangsu-Zhejiang-Shanghai region was busiest, with Shanghai in the heaviest red. Second was the Pearl River Delta in Guangdong, third Beijing.

That matches the ranking of Double 11 spending by province: Guangdong, Zhejiang, Jiangsu, Shanghai and Beijing took the top five places.

According to figures released by Alibaba, by 6:49 pm on November 11 Cainiao's logistics orders had passed 657 million, more than the whole of 2016's Double 11 day. By 9:10 pm they had crossed 700 million.

Wan also said that this year Cainiao cleared customs on 5 million imported parcels in 8 hours and 8 minutes, against 48 hours last year. "Customs clearance determines the efficiency of the entire cross-border import chain. Working with the General Administration of Customs, clearance is no longer the bottleneck in that chain this year," Wan said.

Customs policy, though, could still change.

Update, 10:30 pm on the 11th: paying off a friend's Huabei bill is about to launch, and the room warms up

Two hours before midnight, Ant Group CEO Eric Jing took the stage.

Among the numbers Jing shared, the one that captured how much Double 11 has changed over the years was the length of an Alipay transaction number. In 2011 it was 16 digits; this year it has grown to 28. Jing said there had already been 1.36 billion Alipay transactions today. "Basically every person in China has placed at least one order through Alipay," he said.

As in previous years, Double 11 orders default to paying with Alipay's Huabei credit line. Jing announced on stage that the feature for paying off a friend's Huabei bill would launch at midnight on the 12th. With help from the host and the Tmall Genie, he picked three people out of the audience. "I'm paying off today's Huabei bills for these three, out of my own pocket," Jing said. "You've still got an hour and a half until midnight — feel free to keep shopping on Huabei."

Before he finished the sentence, the room had already warmed up.

Through the afternoon, executives from Alibaba's various business lines had come on one after another, in person or by video link, to speak about their operations.

After Ant Group, the whole venue was simply waiting for Alibaba founder Jack Ma and CEO Daniel Zhang.

To push sales higher, notifications from merchants and from the Taobao system arrived on people's phones more and more often. With less than an hour and a half left in the day, total sales had already climbed to 156.8 billion yuan. To find that real-time number we had to walk out to the experience zone outside the media center, where a small screen carried the transaction display. Inside, the screen was cycling through promotional videos for Alibaba's e-commerce platforms.

Update, midnight on the 12th: 168.2 billion yuan

In the last ten minutes before midnight, Alibaba brought five people from five continents on stage: a customer-service representative from the Eurail flagship store on Fliggy, in the Netherlands; a representative of small and medium-sized U.S. businesses; a YTO Express courier from Sichuan working his ninth Double 11; an Alipay merchant from Australia; and the Nigerian e-commerce entrepreneur Jessica Anuna.

Alibaba CEO Daniel Zhang appeared in person at the Shanghai media center for the first time in these twenty-four hours.

Two minutes before midnight, the big screen switched back to the total sales figure — the image reserved for the end of every Double 11, nothing but the GMV number. Every reporter in the room stood up, cameras and phones raised to catch the final moment.

With the host's voice turning slightly hoarse, Alibaba's Double 11 scorecard for the year froze at 168.2 billion yuan.

At this moment last year the screen read 120.7 billion yuan. The figure had grown 40%.

After midnight the room settled into something calm but busy, people glancing up now and then at the frozen number while they waited for the last act of this Double 11: speeches by Daniel Zhang and Jack Ma.

Update, 12:40 am on the 12th: Jack Ma came, then left

At 12:14 am, Daniel Zhang came on stage. In a 17-minute speech he called this year's Double 11 "the Olympics of commerce."

He said the past year had been the first year of Alibaba's New Retail. Double 11 would go on, he said, but the way it is run will certainly change.

Jack Ma, who appeared only briefly, listened to the speech from the audience and said nothing in public. Wearing a flat cap, he left with Zhang, surrounded by no fewer than 50 security and support staff.

The venue then began playing the Gong Shou Dao theme song, a duet by Jack Ma and Faye Wong, on a loop. On stage, Alibaba staff were already taking photos in front of the 168.2 billion yuan figure. Another Double 11 was over.

Cover image from the Double 11 gala. Unless otherwise noted, all photos were taken by the author.