China's 11.11 Shopping Festival Sees Massive Sales in First Few Minutes [Video]

(This story has been amended, adding the estimated sales total for Cyber Monday in 2012)

China’s largest online shopping festival on got off to a big bang this year, with more than RMB 1 billion ($164 million) in transaction value recorded over Alipay in the first six minutes of November 11, a milestone that took an extra 31 minutes to hit last year.

This year’s 11.11 sale, conducted on Alibaba Group’s business-to-consumer platform, involves over 20,000 merchants, including big brands like Gap and Uniqlo, who are offering huge discounts on an array of goods.

Last year’s 11.11 sale, became the world’s largest shopping event when it saw nearly RMB 19.1 billion ($3.1 billion) transacted in a single day, this beat the previous 24-hour online sales record of $1.25 billion on Cyber Monday in 2011. Cyber Monday sales totaled $1.98 billion last year, according to Adobe Digital Index.

Within the first 38 minutes, Alipay saw RMB 5 billion transacted over its payment platform, a number that soared to RMB 6.7 billion ($1.1 billion) in the first hour. Chinese smartphone maker Xiaomi and European fashion brand Bestseller were amongst the first companies to hit RMB 100 million in sales during the shopping festival.

This year, merchants extended their promotional activities to some 30,000 of their offline stores, underscoring the importance of offline-to-online retail convergence. Daphne Lee, the head of Taobao’s International Business said recently she expects the number of international consumers participating in this year’s 11.11 to rise, with more than 1,000 merchants selling into the Hong Kong, Taiwan and Southeast Asian markets.

The fashion category accounted for about half the value of transactions in the first hour at more than RMB 3 billion ($492 million).

“If you look at the absolute value of the 11.11 day in terms of gross merchandise value for Tmall, it’s just crazy,” said Serge Hoffman, partner at Bain & Company.  “More and more consumers are joining the e-commerce party. With the penetration of advanced digital solutions like smartphones, this gives users almost 24/7 access to e-commerce,” Hoffman said.

Bain & Company expects China’s e-commerce market to surpass the United States this year to reach RMB 3.3 trillion by 2015.

Watch a video on the jobs impact of 11.11 in China