Always a key event on the online seller’s calendar, Amazon Prime Day is fast approaching. So, now is the best time to get prepared.
Since its adoption by Chinese online shopping platform Alibaba, this anti-Valentine’s Day celebration for ‘singletons’ in China has been transformed into the world’s largest 24 hour shopping event, eclipsing the sales of Black Friday/Cyber Monday combined by some considerable margin.
But, belying its origins, some 60 percent of Chinese consumers making purchases on Singles’ Day now are married, against a quarter who are single. And according to Alibaba, it’s set to move way beyond China to become a global holiday in the next five years.
It’s hard not to be swept along in the hype. The statistics, as with anything to do with China, are impressive. But what does Singles Day really offer etailers outside China? And is it worth the additional effort to take part?
We consider what it could offer your ecommerce business.
Singles Day originated in Nanjing University when the large number of single males adopted November 11th as their special day. This date was selected because it is represented by “four lonely sticks”: 11/11. The imbalance in sexes to the detriment of males is the result of the former Chinese government’s one-child policy.
The day really took off in 2011 (11/11/11), since when it has become both an unofficial holiday and, thanks to its adoption by Alibaba in 2009, a huge shopping event in which single people treated themselves to something new.
Alibaba undoubtedly spotted the commercial opportunity in this celebration of singlehood to boost sales in the lull between the October Golden Week national holiday and the Christmas season.
Just 27 merchants on Alibaba’s Tmall.com site participated in 2009, offering major discounts to boost sales during this traditionally quiet period. In contrast, Singles Day 2015 involved 40,000 merchants offering six million products, including some 30,000 international brands from 25 countries. The most popular categories were clothing and accessories, cosmetics and personal care, household products, appliances, and food and beverage.
A statistics snapshot
To give a flavour of just how big a deal Singles Day is now, econsultancy.com offers the following stats:
- In 2009, just $5m was spent during Singles Day
- In 2013, consumers spent $5.6 billion and sales had overtaken Cyber Monday’s $1.46 billion by 8:42 a.m.
- In 2014, over $9 billion was spent overall, with $100 million spent in the first three minutes
- In 2015, sales topped $14.3 billion with over $1.4bn spent within the first 8 minutes.
- By comparison, Cyber Monday 2015 in the US exceeded $3 billion for the first time, with sales for the five-day period starting on Thanksgiving totalling $11.11 billion.
- 100 million orders were placed within the first hour – with packages already starting to arrive at shoppers’ homes within that hour.
- 120,000 orders were placed every minute, according to estimates.
- 71 percent of Alibaba’s Singles Day sales came from mobile devices, compared with 43percent the previous year.
What can we expect from Singles Day 2016?
"The numbers will be big and they’ll be bigger than last year," according to Alibaba President Michael Evans in an interview for Bloomberg TV. But the company is also planning a “great social experience” for shoppers.
The razzamatazz includes mobile live streaming, virtual reality shopping, interactive games, an eight-hour live-streamed fashion show and culminates with a “Super Bowl-like” countdown celebration to midnight on 10th November, with a number of celebrities taking part.
Globalisation is one of the top priorities for Alibaba, and this Singles Day the company will be helping overseas merchants to sell to consumers outside the Chinese mainland, with hundreds of overseas brands on Alibaba's Tmall platform able to sell directly to online shoppers in Hong Kong and Taiwan. This is thought to be a ‘toe in the water’ move by Alibaba as a precursor to plans to achieve a consumer base of two billion in the next 20 years.
What’s in it for you?
For online retailers based outside of China, Singles Day offers a number of opportunities:
Significant discounts on Alibaba sites are good news for internet retailers looking to source products.
- If you are already selling in China, use Singles Day to increase your presence there and improve brand awareness.
- Consider running Singles Day promotions in the UK to pick up interest from Chinese consumers locally and in other countries.
- Use Singles Day as a ‘test market’ exercise to explore the appetite for your products in China.
- Leverage marketplaces to help you take part– they enable retailers without a physical presence in China to sell online to Chinese consumers. Singles Day 2016 promotions will be available on Tmall.com, Taobao.com, Aliexpress.com and Alibaba.com. Aliexpress and Alibaba are in English and cater to the international shoppers. Apps are available for both for mobile shopping.
3. Getting a good start for Christmas
You could use Singles Day promotions as a means of attracting early Christmas shoppers and steal a march on your competitors who may be banking everything on a successful Black Friday/Cyber Monday. In fact, Singles Day could be a good way to test out promotions before that event.
4. Taking advantage of the demand for British goods in China
According to Melissa O’Malley, director, global merchant and cross-border trade initiatives at PayPal, the UK is “the second most popular online overseas destination for Chinese shoppers, and when shopping for British goods online, they are considerably more valuable and loyal than their British counterparts. Chinese shoppers spend almost three times more in each online transaction, and repeat buy from the same UK retailer nearly twice as much.”
What do you need to do to be Singles Day ready?
Selling into China is a major business decision for any online retailer to take, so the following comments assume that you already have a presence there (direct, or via a local or international marketplace), or are at least a long way down the line to establishing one. These pointers are reminders of what should not be overlooked for this concentrated 24 hour event.
- Research the Chinese market thoroughly to understand what kind of special offers Chinese consumers will be looking for on Singles Day.
- If you are selling via Alibaba on Singles Day, ensure they have sufficient quantities of stock available at a good price. Focus on the stock, the price and readiness to ship.
- Ensure you can handle large volumes of traffic across your website – and will be able to fulfil a surge of purchases in a 24 hour window.
- Be confident of delivering a high-quality customer experience, right from browsing through to purchase and fulfilment.
- Recognise the importance of ‘social selling’. Use of social media is essential in China to spread word of mouth and to ‘share’ what you bought. It’s also a great way to create a buzz around your products. China has a very social- and mobile-driven culture, and influencers are a key part of the selling/buying process there.
- Don’t rely on using the same social media platforms you would in the UK and other international markets: Facebook, Twitter, YouTube and Instagram are blocked in China.
- Similarly, you can’t just rely on Google as a search engine. Baidu is the dominant search engine in China with almost 80 percent market share. Search results are indexed, as with Google, and over time you can move up the listings organically. But if you’re new to the Chinese market, you may want to consider some pay-per-click advertising to increase your profile – particularly given the importance of Singles Day.
- Be prepared for the importance of mobile. As noted earlier, some 71 percent of Alibaba’s Singles Day sales came from mobile devices in 2015, compared with 43 percent the previous year. You must be able to deliver a robust mobile experience that allows consumers to browse and buy easily. Be aware that Chinese consumers access their smartphones regularly to check for deals and make purchases throughout Singles Day. They are accustomed to having a good mobile experience from Chinese retailers.
- Don’t feel you have to wait for 11th November: some sellers start listing Singles Day prices in mid-October, taking deposits and then shipping the goods on the day itself.
Is it worth the effort?
At around 668 million, China’s online population is the world’s biggest. It is wired into the world's largest and most dynamic e-commerce market, which has seen a surge in cross-border trade recently, driven by the appetite for international brands.
So, here are five reasons why the opportunities of China’s e-commerce market could be worth your making the effort for Singles Day:
- Digital shopping in China grew by more than 70 percent in 2015, driven by a higher standard of living combined with a greater exposure to, and knowledge of, foreign products.
- Within this, cross-border consumer e-commerce amounted to an estimated $40 billion. That’s more than 6 percent of China’s total consumer e-commerce – and it’s growing in excess of 50 percent annually.
- According to estimates from eMarketer, in 2016, more than 15 percent of the population will make purchases from abroad worth $85.76 billion, equating to an average personal spend of $473.26 on cross-border purchases.
- The country’s major e-commerce site, Alibaba’s Tmall, has opened up a cross-border site (Tmall Global), as have smaller marketplaces (eg. JD Worldwide), and Amazon continues to ramp up its activities in China. This makes it easier for overseas brands to sell their goods directly to digital consumers in China.
- By 2020, a quarter of the population and more than half of all digital buyers, will be shopping either directly on foreign-based sites or through third parties.
*Figures quoted in the above list are from eMarketer, with the exception of point 2, Where the figures are from McKinsey.
It’s hardly surprising that increasing numbers of international retailers are seeing the opportunity offered by Singles Day. And let’s not forget that while Singles Day is predominately a Chinese celebration, it may yet follow the precedent of the Black Friday shopping fest in establishing itself outside of the US – indeed, if Alibaba has anything to do with it, it will become “a global holiday in the next five years.”
One note of caution, however. The data ’11:11’ has a totally different connotation in many countries, where it is marked as Armistice Day. This may deter the wholesale adoption of Singles Day for reasons of sensitivity.
Nevertheless, the countdown to this year’s event is well under way - and undoubtedly yet more sales records will be broken in the 24 hour period from midnight 10-11th November.
So in China at least, Singles Day looks here to stay.