Taobao: China's Cyber Monday Breaks Records, Causes Chaos [PHOTOS]

 @mflorcruzm.florcruz@ibtimes.com
on December 03 2012 1:27 PM
Taobao Protest
A man holds loudspeakers at the entrance to the Taobao office during a protest in Hangzhou, Zhejiang province, Nov. 24, 2011. Reuters

 

As the holiday season approaches, many turn to online shopping for the convenience of home delivery. In China, postal offices are in disarray after a record-breaking online sale, comparable to the American Cyber Monday on Taobao.com, backed up mail delivery and created logistical chaos, begging the question: Can China's e-commerce industry handle China's millions of consumers?

The Nov. 11 sale date, or "1111," was launched in 2009 by Taobao TMall. The 11/11 date traditionally marks Singles Day in China, because of the symbolic solitary look of the 1s, but is likely to take on a new meaning after Taobao's TMall used this day to start what some media are calling a "shopping carnival."  According to the Xinhua news agency, the Nov. 11 revenue this year on Taobao TMall, a Web-based shopping site similar to Amazon, reached 19.1 billion yuan ($3.043 billion), exceeding all 24-hour online sales numbers the U.S. has ever had.The sales volume during various points over the 24-hour sale was tracked periodically; in the first 70 minutes, 2 billion yuan was already spent.Just after 1:30 p.m., the company's sales goal for the entire day of 10 billion yuan was reached.Taobao reported that an estimated 21 million online shoppers contributed to the online shopping spree, snapping up appliances, clothing and electronics.However, the huge sale has tested the capacity of China's online banking system and post offices. The sudden surge of customers froze the website's online payment system, tying up servers at four different local banks. China Construction Bank reported that the transaction flow was six times more than usual, and the Bank of China reported its systems failed for 45 minutes in Beijing.Additionally, three weeks later, many customers are still waiting for their purchases to arrive. China's postal services have been backed up, and, as they try to keep up with deliveries, they find themselves bombarded by more. Pictures on the Internet of China's postal debacle are trending and have many concerned about when post offices will be able to catch up.

Caixin interviewed one employee who found himself in a logistical nightmare. Wu Ronghua, in charge of Beyond Home Textiles, did not have time to enjoy the record-breaking sales and instead was faced with several dilemmas: oversold items, empty warehouses, insufficient manpower at third-party logistics agencies and, ultimately, delayed deliveries.The site, which typically guarantees a seven-day delivery period, was not expecting the kind of sales volume it got and was unprepared."Almost every single product was oversold," Wu said. "I had to later ponder over how to resolve the issues of allocating more goods for sale and how to get these 20 million [orders] delivered within seven days."Out-of-stock items were mistakenly still available for purchase because Taobao's system was not able to distinguish simultaneous payments during particularly heavy sales periods.Logistics providers were also swamped after not being given fair warning of the impending volumes. As a result, they could not prepare for the increased shipping needs that such big sales would require, by adding additional workers and extended shifts.But this is not the first time delivery delays have occurred. Last year, 20 million packages were delivered from various online sites; some customers waited three months before finally receiving their Taobao purchases.Online shopping has become popular worldwide, but in nations like the U.S., digital shoppers rely on timely deliveries to get their holiday goods. In China, the convenience of online shopping is lost. Many kinks in the Chinese digital shopping experience still need to be worked out in order to improve the shopping experience for China's millions of consumers.

Share this article

More News from IBT MEDIA