Alibaba Group kicked off its annual shopping event at midnight on Friday and within the first five minutes processed $1 billion in transactions via Alipay.
Within two hours, $7.2 billion of gross merchandise volume (GMV) was settled by Alibaba on Alibaba's China and international retail marketplaces, with mobile transactions via Alipay accounting for 84 percent of total GMV.
The event, known as the 11.11 shopping festival, begins at 12.00am and lasts 24 hours.
"Chinese consumers purchased more in the first hour of 11.11 -- $5.2 billion -- this year than the entire 24 hours in 2013," said Daniel Zhang, chief executive officer of Alibaba Group. "This unprecedented level of engagement demonstrates both the consumption power of Chinese consumers and their embrace of online shopping as a lifestyle."
China recently dethroned the US as the world's largest market in mobile payments with a transaction volume of $235 billion. At the current growth rate, China is expected to process $6.3 trillion in mobile payments by 2020.
For the first time, in the hours leading up to midnight, customers watched Alibaba's Global Shopping Festival Countdown Gala live online and on mobile devices via Youku Tudou and the Tmall and Taobao apps. The gala was also televised live across China through Zhejiang Satellite TV, as well as in Hong Kong and Macau.
"Viewers were able to influence the production of the show in real-time through their mobile phones," said Chris Tung, chief marketing officer of Alibaba Group. "Consumers in front of their televisions were shaking, tapping, scanning, chatting, browsing, and buying with their mobile devices, creating a seamless and truly immersive entertainment experience."
Last year, Alibaba reported in excess of $1 billion in GMV transactions in the first 8 minutes of 11:11, and $5 billion in the first 90 minutes.
The company reported overall revenue of $5.14 billion in the July-September quarter this year. While 83 percent of Alibaba's revenue is commerce related, its cloud computing group Alibaba Cloud has moved up to 4 percent of overall sales from 3 percent a year ago. Alibaba's cloud revenue surged 130 percent from a year ago to $224 million.
Alibaba Group also announced this week that it is working with Intel in areas such as artificial intelligence (AI), machine learning, Internet of Things (IoT), and smart hardware, with Intel releasing the first customised CPU for Alibaba Cloud earlier this year.
Alibaba and Intel also established a joint innovation centre this year, specialising in the research and development of technology in semiconductor chips, cloud computing, and IoT, and Alibaba believes that AI is key to building out sound infrastructure for commerce.
In an effort to expand into Australia, Alipay entered into a memorandum of understanding with the Commonwealth Bank of Australia to deliver payment solutions to Australian and Chinese consumers and retailers.
Under the agreement, Alipay, which has more than 450 million daily users globally, will be able to use Commonwealth Bank's digital payments infrastructure to enable Australian consumers to make purchases across Alibaba Group's ecommerce websites including AliExpress.
The deal with Alipay will also allow Commonwealth Bank to target Chinese tourists -- about 19,000 Chinese tourists visit Australia every week and spend almost AU$8,000 per person -- as well as Chinese students living in Australia.