Every year, retailers try to predict consumer behavior in advance of Black Friday and Cyber Monday in order to make big sales. While these shopping days are a week away, we can look to China’s designated day of shopping – Singles’ Day, November 11 – where Alibaba has already made record-breaking sales for insights and lessons.
What Is Singles’ Day, and Why is it a Big Deal in Retail?
Created in China as a day of celebration for single people, Singles’ Day has been held every year on 11/11 since the 1990s. Six years ago, Alibaba turned Singles’ Day into a major buying holiday: Total sales in 2009 added up to ￥52 million, and in each subsequent year, the figure has jumped to ￥936 million, ￥5.2 billion, ￥19.1 billion, and￥36.2 billion before hitting a new high of ￥91.2 billion this year. That is equivalent to $14.3 billion.
According to the World Economic Forum, Cyber Monday had been the world’s biggest online shopping day every year since its introduction – until Singles’ Day surpassed it in 2012. Moreover, Singles’ Day boasts a much higher year-over-year growth rate than Cyber Monday, as demonstrated in this Reuter’s chart.
This year, a forecast by Adobe’s Digital Index has Cyber Monday sales reaching $3 billion. While this would represent 12% growth from 2014, the sales gap between Cyber Monday and Singles’ Day continues to widen.
What were Some Standout Keys to Singles’ Day Success?
Star Power and Television
This year’s Singles’ Day was bolstered by popular star power and a “sales push” gala on November 10, directed by Feng Xiaogang, who is known for his top-grossing comedy movies. The gala invited celebrities including British Actor Daniel Craig, American singer Adam Lambert, American actor Kevin Spacey, as well as famous actors and actresses from China who were also spokespersons for products sold on Alibaba’s marketplaces. After the performances and promotions at the gala, which was broadcasted live on TV, online traffic and sales substantially increased.
According to the data publicized by Alibaba Group, 68.7% of transactions were done via mobile device and using mobile payment, which translates to 158% growth year over year. Mobile sales alone, which added up to $9.8 billion, exceeded total sales on Singles’ Day a year ago.
Alibaba CEO Zhang Yong mentioned that, besides strengthening technical infrastructure for the influx of traffic on Singles’ Day (which included setting up hundreds of tents in their campus for support engineers rest between shifts), the company had also focused on gathering and analyzing all consumers’ previous shopping behavior to provide highly customized product recommendations, thereby improving user experience and better supporting sales.
The Growing Reach of Singles’ Day Underscores Alibaba’s Influence on Retail
Alibaba continues to push Singles’ Day globally – this year marked the first time the event was officially named the “11.11 Global Shopping Festival.” Consumers found that not only did the gala include international celebrities, but also that the online shopping malls had more international brands participating in the event.
According to Alibaba, more than 5,000 brands from 25 countries joined the festival, and over 30 million consumers (over 33% of total consumers who participated in Singles’ Day) purchased products from foreign brands.
Alibaba’s President Michael Evans has spoken about the company’s focus on attracting U.S. retailers to China and, as expected, the U.S. ranked as the top market selling to China during the festival. While some American brands sold their products through available platforms such as Alibaba’s Tmall (Macy’s opened a Tmall store a few days before Singles’ Day), others sought to draw customers directly to their own sites. For example, Nordstrom, Saks Fifth Avenue and Neiman Marcus were part of the 130 American brands that worked with a Chinese deal site dealmoon.com to sell directly to Chinese consumers with specific Singles’ Day online coupons.
As global brands continue to navigate ecommerce in China, Alibaba will help set the tone for opportunities – its successful promotion of Singles’ Day helps make that clear. As we’ve written before, Alibaba’s Tmall is an appealing way for a foreign company to engage in e-commerce in China, and some eyes are on IDN gTLDs as another avenue to consider into foreign markets. Alibaba itself, for example, acquired some of its primary brands in Chinese characters under the .在线 (.ONLINE), .中文网 (.CHINESEWEBSITE), and .移动(.MOBILE) IDNs.
The lessons from Black Friday and Cyber Monday are still ahead, but brands can already consider the insights gained from Singles’ Day and Alibaba as they prepare their digital strategies for 2016.