Risks associated with global sales days

Each year on November 11 China’s ‘Double 11’ or ‘Singles Day’ event takes place. The astonishing statistics around the volume of goods sold over the course of the day bring to light the significance of sales days on global e-commerce logistics.

Referenced in the brief ‘Sales day volumes disrupt seasonality’, Alibaba expected to log 600m transactions through its Taobao Marketplace and TMall platform on Singles Day, a 30% increase from 2015’s 467m. This aim was more than surpassed in the 2016 Double 11 event with the company reportedly recording 1bn transactions over the course of the day, a 48% increase on the previous year.

Cainiao, Alibaba’s express delivery platform uses big data to improve the delivery experience. Tong Wenhong, Cainiao’s CEO, explained, “If we don’t try a new method and build a stronger logistics network, online retail will be hindered. Courier services have been renovating the delivery network. Cainiao uses big data to help courier companies optimize the process and improve delivery efficiency.”

Since Double 11 there has been a lot of coverage around Alibaba’s successful use of data. One report suggests that a consumer received their parcel within 13 minutes of placing their order. The same article explains that such speed is the result of the company’s use of big data which enables companies to predict popular items and disperse these amongst warehouses and storage sites across the country ahead of the sales day. Then, once an order is placed, the system will locate that item within the warehouse in closest proximity to the delivery address transferring the order information to the warehouse for processing and shipping.

In addition, domestic providers began recruiting to handle these volumes during August and have invested in updating equipment and data support. S.F. Express and YUNDA Express both launched their fully automatic sorting equipment before the “Double 11”. In addition, High Speed Railway (HSR) trains have increased their efforts to be able to deliver goods to customers across China. In response to estimates before the sales day that the company would be handling 80% more volume than the previous year, from November 11 to 20, the company has adjusted its running schedule to include four daily trains running at 160 km per hour to carry goods from Beijing to Shanghai, shortening each trip to 15 hours, including loading and unloading time.

The activities of Alibaba and logistics companies, in response to big data around sales days, may provide lessons for the upcoming Black Friday and Cyber Monday sales days in North America and Europe. Regardless, retailers, consumers and logistics professionals alike will be waiting with baited breath to see which businesses are most successful in their preparations for the peaks of Q4 2016. Indeed, analysis of these preparations forms part of Ti’s Global Express and Small Parcels 2016. To find out more about it, please contact Michael Clover.

Source: Transport Intelligence, November 15, 2016

Author: Lilith Nagorski