Alibaba Crushes Global Online Shopping Day

Alibaba on Wednesday settled US$14.3 billion worth of gross merchandise volume via Alipay, the company’s online payment solution, during China’s 11.11 Global Shopping Festival. That surpassed last year’s $9.3 billion.

Mobile GMV settlements accounted for about 70 percent of this year’s sales.

By 2 p.m. China time, more than 70 million mobile buyers had made purchases worth $7 billion, and Cainiao Logistics, the Alibaba Group’s logistics affiliate, had received 310 million delivery orders.

Here’s another way to look at it: In the first 90 minutes, GMV totaled more than $5 billion, and the first hour of sales saw more than 27 million mobile buyers. Or, if you really want to go crazy, the total GMV settled through Alipay exceeded $1 billion within the first eight minutes.

At the sales frenzy’s peak, 45 million users were online simultaneously, more than 90 percent of whom were making purchases through their mobile devices.

More than 6 million products from more than 30,000 brands offered by over 40,000 merchants were available for the festival.

By comparison, U.S. Cyber Monday sales last year were$2.68 billion.

Alibaba launched several initiatives in globalization, logistics, and mobile and omnichannel commerce to prepare for the rush of orders.

The 11.11 Global Shopping Festival, also known in China as Singles Day, is the world’s biggest day-long online shopping event, the company said.

Go Mobile, Young Man!

“[Our] research indicates that online retail [including] retail over mobile devices, will continue to grow substantially over the next five years,” said Mike Jude, a Stratecast research manager at Frost & Sullivan.

Retailers in the United States “must do what Alibaba has done,” he told the E-Commerce Times. “Everyone competes with online retail now, [and] U.S. retailers have to adopt this technology or die.”

Frost has “noted a growing trend to embed mobile online retail into conventional retail” by, for example, “delivering news of in-store specials to mobile users through WiFi or Bluetooth connectivity,” Jude said.

U.S. retailers are running out of time to cope with this coming holiday season, but “they need to build this capability anyway, so starting now is a good idea,” he suggested.

Building up capacity to handle a surge of orders is easier than it used to be because retailers just have to implement a scalable cloud architecture for their service support systems, Jude said. “That way, as demand ramps up, so can their ability to handle it.”

They can also do what Alibaba did — hold off routine IT work.

Alipay warned customers that it would delay transaction records and settlement records queries, servicing SFTP transaction files and possibly settlements from the day to make way for the expected flood of orders.

Issues With Fraud

Legacy security systems find it difficult to keep up with the volume of various transactions on major shopping days such as Singles Day in China or Cyber Monday in the U.S., said Yinglian Xie, CEO ofDataVisor.

Also, many promotional abuse attacks cannot be detected using standard rules or models-based transaction fraud solutions, she told the E-Commerce Times. Cybercriminals abuse promos by “registering thousands of fake accounts, buying up all the merchandise and creating a large gray market for these goods after the promotional period ends.”

Increased mobile device use will push up the number of events to be analyzed for fraud and pose a new challenge “as there are a lot of new attack tools becoming available that let bad actors pose as legitimate users — mobile device flashing, GPS fakers or anonymous proxies to hide attackers’ identities and true geographic locations,” Xie pointed out.

One solution is to use a big data security analytics service that can scale to handle billions of events per hour.

“Merchants should be doing basic fraud control checks,” Bobby Kuzma, a systems engineer atCore Security.

That includes phone verification for large or anomalous orders, he told the E-Commerce Times, and making sure the billing and shipping addresses are the same, and the IP addresses from which orders are received are physically close to buyers’ locations.

Richard Adhikari

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

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