November Event A – 11 Nov: Singles Day
In China, whether you’re single, married, young or old, everyone participates in spending on Singles Day. Although initially a made-up holiday by university students in the 90s (as an antithesis to Valentine’s Day), the day now marks the biggest annual shopping day in the world. Celebrated on ‘11.11’ (numbers being auspicious in the Chinese culture), the concept of Singles Day was tactically incorporated by Chinese ecommerce giant Alibaba, to promote sales on thousands of products on their platforms. Since then, it has drawn many retailers to jump on the bandwagon, and participate in the day’s sales to lift revenue.
Alibaba first capitalised on Singles Day in 2009, during the usually slow season before the Lunar New Year season. Last year, the company made gross sales worth $17.8bn on their one-day sale; a 32% rise from 2015 (CNBC, 2017), and more than Brazil’s total annual ecommerce sales. It’s worth mentioning that this figure is nearly triple that of Black Friday and Cyber Monday sales in 2016 combined (Business Insider, 2017).
The 11.11 sale also topped Amazon’s 30-hour Prime Day in July 2017, which only sold around $1bn worth of merchandise. Following the early success of the sale event, Alibaba trademarked the term ‘Singles Day’ in 2014, prohibiting other Chinese publishers from using it in ads to promote their sale (Tech In Asia, 2014).
Bigger and better this year, with Alibaba’s ‘New Retail’ initiative
Jack Ma, Founder and Executive Chairman of Alibaba Group, foresees the future of retail as being a form of entertainment. Therefore, consumption and entertainment should be merged to revolutionise retail; whether that’s visiting stores on phones, trying on clothes in virtual fitting rooms, or playing games.
On 31st Oct 2017, Alibaba launched its 11.11 Global Shopping Festival on its Tmall platform, running for 24 days to cover the ‘festival season’. With a blend of online and offline, more than 140,000 merchants are taking part in the festival; under a decade ago, the sale began with only 27 merchants. As a step towards uniting his ideas, ‘smart’ pop-up stores, in partnership with top global brands, have been spread across 12 cities in China, featuring augmented reality, mobile apps etc. to promote digitisation (Retail Gazette, 2017).
The global shopping festival should not be mistaken for just a single-day revenue boost. In fact, Alibaba is initiating its vision for retail’s future; a globalised ecosystem for businesses of all sizes. “We want the ‘China phenomenon’ to spread to the whole world”, said Alibaba’s Chief Executive, Daniel Zhang Yong (SCMP, 2017). This year, more and more international transactions are being encouraged. To support offline sales, Jack Ma has established strategic partnerships with big shopping malls. So, for customers on Taobao with credit on their accounts, these can be redeemed offline as well; encouraging store visits.
Challengers – the Power of Synergies
JD.com will be joining the mega shopping event this year. In partnership with Walmart and Tencent, the retailer will undoubtedly make use of WeChat and WeChat Pay, to improve the convenience for shoppers (Market Realist, 2017). Along with running campaigns in its own physical stores, JD will harness the space available from Walmart’s 400 stores across China.
Rules of the sale
As the strategies develop so do the ‘rules’ of the sales. No longer are consumers just invited to spend at will on promotions (such as discounts, vouchers or presales), but are now coerced and manoeuvred to accept the rules imposed by retailer, for fear of losing out. Presales now have limited spaces, with time-sensitive conditions applied to participate and qualify for ‘super’ discounted offers, and ultimately spend on the goods (Yule, 2016).
And tactics don’t just stop there. Singles day has now become a marketing day where retailers focused on stock control. The traditional pattern for consumers to enjoy a day of discounts on ‘luxury or big’ items such as air purifiers and electronics, are now superseded by retailers pushing past season stock or affordable everyday necessities. Some shoppers have observed that the displayed ‘discounted’ price can in fact be more expensive than the original price; so many products are not discounted after all. Therefore, casual shoppers hoping to find a bargain might lose out by paying higher-than-usual prices; making it somewhat difficult for them to understand if they really are saving any pennies after all…
Nevertheless, the Singles Day sale remains a significant ecommerce day for Chinese and global brands. Many retailers have already begun to follow Alibaba’s steps and increased their product offerings on the day. In the coming years, we can expect to see the new ecommerce day becoming a greater deal in other countries too.
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Thank you to our team contributor: Charlene Gao, Business Development Associate China.