(Bloomberg Opinion) – The Alibaba Group Holding Ltd. should put the recreation in the Singles' Day shopping extravaganza for pasture.
The Nov. The 11 annual event, which has been going on for over a decade, began as a marketing gimmick for an upstart e-commerce company looking to draw a crowd. And it did.
The 24-hour shopping, in which Alibaba and its vendors offer a huge discount while celebrities (Taylor Swift this year) jets to entertain audiences, has focused on a number : gross merchandise value, a fancy word for turnover, or the amount of money slipping through the cash registers of the company's e-commerce platforms.
GMV grew more than 4,000 times between 2009 and 2018, reaching $ 30.8 billion last year. But the scale makes no sense. There are ways to juice the figure, and it's almost zero correlation to Alibaba's income or profits. In fact, Alibaba stopped reporting on GMV in its quarterly financial two years ago (though it still refers to a growing number).
"This does not represent our true identity, and excessive esteem is only making people think about e-commerce," Founder and then-Chairman Jack Ma said in a 2016 shopping gala. However the company went ahead and shouted numbers from the roofs next year. And next year. "Eye numbers," Alibaba said in a note last year.
I thought it was because without a glossy big new number, it would lose its advantage. That in turn created a spur to find new ways to wrap the figure, such as getting orders in advance, avoiding processing refunds that day, and offering incentives to transact. News that Alibaba is moving ahead with plans to raise nearly $ 15 billion in shares in Hong Kong adds further incentive for the company to report a bumper November 11.
It doesn't seem that Alibaba invented Singles' Day. Represented by the 11/11 date, it dates back to at least the early '90s as a student celebration of one life. Ma and a well-known executive named Daniel Zhang made it commercial, similar to the way retailers marketed Valentine's Day on a smorgasbord of cheap chocolates, fluffy toys, and bad dates. Black Friday and Cyber Monday are flawless, but neither are company-driven. (Cyber Monday is reported to be the brain of a US retail organization).
Alibaba no longer wants to be just an e-commerce company. Zhang, who rose to the rank of chairman from Ma two months ago, is expected to lean more toward new businesses such as cloud computing, digital media and entertainment, offline retail, and local services such as deliveries.  But the company could not move in the post-Jack era if it continued to focus on GMV. Until the annual shopping event continues with a single focus on sales numbers and stunning discounts, then the whole company, and its investors, are stuck in the mindset that Alibaba is just an e-commerce company.
"If we don't kill our existing business, somebody else will," Zhang said in an interview with Bloomberg Businessweek in September.
Zhang is correct. And he knew what he needed to do.
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Tim Culpan is a Bloomberg Opinion technology covering technology. He previously covered the technology for Bloomberg News.
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