China’s Alibaba Group, a major e-commerce website and company, reported record sales over the weekend during Sunday’s “Single Day” holiday sales event, which featured several promotions and discounts. According to a report from Reuters, the firm boasted $30 billion in sales during the event, with $10 billion being taken in during the first 60 minutes. This year’s sale surpassed last years by about $5 billion, and totaled more than the combined sales last year’s of Black Friday and Cyber Monday sales in the US.
However, while the company celebrated the record profit, some inside Alibaba Group were concerned to learn that the sales event’s growth rate fell by 12 percent, bringing it down to the lowest level in the event’s history. This news comes after the sales report from the summer months showed similar downturns in sales growth. Many experts believe the ongoing economic dispute between the United States and China is having a more pronounced effect on the Chinese economy than previously thought.
Worse still for the company, the stock price of Alibaba Group remains down by almost $40 from this time last year and shares have fallen by more than 15 percent since January. These weak numbers have pushed the firm’s 2018 total sales projections down by around 5 percent. While Alibaba is probably China’s most well-known online merchant, online sales across all sites in the country have been down throughout the year, especially in larger urban areas.
While the company’s outlook is depressed — if not bleak — all hope isn’t lost. According to a report from CNBC, Alibaba Group recently inked a deal with Starbucks. According to the press release from Starbucks, the new partnership will bring Alibaba’s popular “pay with your phone” grocery store concept to the coffee shops. The coffee-powerhouse will also use Alibaba’s digital infrastructure to bring more customized customer rewards to its customers, as well as create a Starbucks delivery service.
“Thanks to the elevated customer experience delivered by our over 45,000 partners, Starbucks is growing and innovating faster in China than anywhere else in the world,” said Kevin Johnson, president and CEO of Starbucks in the press release. “Our transformational partnership with Alibaba will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers. Starbucks China is one to watch, and I have full confidence in the team that will bring the new innovation behind the Starbucks Experience to life.”
According to CNBC, the Starbucks partnership is one of several new concepts Alibaba will be rolling out during the next few months. The firm calls its latest strategy “new retail” and hopes to unite all aspects of the company’s operations into one full-spectrum shopping experience. However, some of the company’s officers believe the poor sales numbers are more a symptom of strained diplomatic relationships with the West and not a reflection on the firm itself.