Alibaba Group Holding is open to working with EBay's PayPal to offer more payment options after shoppers bought a record 57.1 billion yuan ($10.7 billion) of goods during the Chinese company's annual Singles' Day promotion.
Asia's largest internet company also sees Apple's payment system as an option to help Chinese consumers when Alibaba's finance affiliate Alipay isn't accepted, Vice Chairman Joseph Tsai said in an interview in Hangzhou, China. Alibaba said earlier that it beat last year's record of 36.2 billion yuan for the November 11 promotion within 14 hours.
Less than two months after completing the biggest initial public offering ever, China's largest e-commerce operator is setting its sights on global expansion as it seeks to attract international merchants and consumers for its platforms. Its financial affiliate is the biggest payments processor in China and also has 17.9 million active users overseas in more than 100 countries.
"If you look at our footprint of being the largest online payment company in China, and PayPal's position of having a very good international position, not just in the US but also in some other countries, these are some complementary footprints," Tsai said on Tuesday in Hangzhou, China.
EBay is splitting off PayPal to create two independent companies next year. The split may value PayPal at $US47 billion, applying a multiple of 1.8 times trailing 12-month revenue -- similar to Amazon.com's -- to EBay's marketplaces and advertising businesses, Bloomberg Intelligence analysts Praveen Menon and Paul Sweeney said last month.
Alibaba's financial affiliate Zhejiang Ant Small & Micro Financial Services Group is the owner of Alipay and controlled by founder Jack Ma.
Merchandise sold on Tuesday by Alibaba's platforms is more than the $US5.29 billion of US online sales from Thanksgiving through Cyber Monday in 2013, the company said. The company using 27,000 labels to attract shoppers, including Calvin Klein, Costco Wholesale and American Eagle Outfitters.
Alibaba fell 3.9 per cent to close at $US114.54 at in New York trading on Tuesday.
But the decline, its biggest in over a month, followed strong gains ahead of the sales event.
Alibaba's "share price went up a lot in anticipation the November 11 day sales would be good," said Jeff Papp, a senior analyst at Oberweis Asset Management, which oversees $1.5 billion. "People buy on the expectation and they sell when the actual result comes out."
For this quarter, the question is what these numbers mean for the company's margins, he said.
Singles' Day
Singles' Day, a Chinese twist on Valentine's Day, was invented by students in the 1990s, according to the Communist Party-owned People's Daily. When written numerically, the date is reminiscent of "bare branches," the Chinese expression for bachelors and spinsters.
Alibaba's Tmall began marketing November 11 as its biggest sales event in 2009, rivals jumped on board, and the day turned from an opportunity to seek out a partner - or celebrate singledom - into an online shopping bonanza.
"November 11 is a key milestone for Alibaba," said Allen Xu, managing director of consultant OgilvyOne Shanghai. "The company used the festival to build its dominance as an e-commerce player linking businesses to consumers in China. With the IPO of Alibaba, the company has the ambition to make this brand go global."
Xiaomi, China's biggest smartphone vendor, sold 720,000 Mi phones worth 1 billion yuan ($188 million) in 12 hours, Vice President Hugo Barra said in a Twitter post.
Shopping from mobile devices will be 45 per cent to 50 per cent this year, said Steve Wang, Alibaba's Tmall President.
Alibaba raised a record $US25 billion in September's IPO after it increased the amount of stock it was selling and the price of shares.
Since its September 19 debut, the stock has surged 68 per cent in New York, and the company has posted quarterly earnings that beat analysts' estimates.
'Globalisation should come naturally'
While Alibaba has been building its US operations and chose New York for its IPO, the company struggles for recognition in the world's largest economy.
Among 3,500 US online shoppers surveyed, 63 per cent said they were unfamiliar with Alibaba, according to Los Angeles-based marketing consultant Connexity.
"This is the sixth year of November 11; I think with four more years of preparation, globalisation should come naturally," Alibaba Chairman Ma told reporters in Hangzhou this week.
Apple in September announced Apple Pay, a way for people to use an iPhone to pay for goods in stores. Mobile payments in the US are projected to total $US118 billion by 2018, up from $US3.5 billion this year, according to EMarketer.
Ma and Apple Chief Executive Officer Tim Cook last month said they are open to working together on projects that would turn phones into tools for buying and selling goods.
"Their team is talking to our team," Tsai said this week. "We would be interested in working with them to power that payment function."
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