Think Black Friday is big? It’s nothing compared to China’s Singles’ Day
Black Friday – the day after Thankgivings Day – is known as one of the biggest shopping days in the calendar. However, Black Friday nothing compared to China’s Singles Day 11:11.
When the clock struck midnight on 11 November 2018, so began the world’s biggest shopping spree. Singles’ Day or, as its officially called, the Global Shopping Festival 11:11, is like combining the Olympics and the World Cup into one event for Chinese ecommerce giant Alibaba. Think Boxing Day sales, mixed with Black Friday and add in a bit of Eurovision kitsch.
Singles’ Day started in the 1990s when young single people used it as an excuse to get together. Then in 1999 Alibaba co-opted it and turned it into a shopping event. Now it’s not just a single day, it’s a 20-day shopping festival, the biggest event in retail and ecommerce in the world and an orgy of consumption.This year’s Singles Day smashed the previous year’s record by racking up sales of 213.5 billion yuan (£24bn or $30.8bn) within 24 hours.
$30.8 billion in sales. In one day. That number was 27% up on 2017 – more than Black Friday and Cyber Monday combined, times two. US Black Friday sales in 2017 were $5bn (£3.9bn).
The gargantuan statistics don’t stop there. Sales hit $1bn (£778m) just one minute and 25 seconds into the event; just over an hour in and they had exceeded $10bn (£7.8bn). Alibaba also set a world record for most payment transactions with Alipay, its online payment platform, processing 256,000 payment transactions per second. The number of delivery orders surpassed 1 billion. A reminder – this is in just one day!
The sales figures dwarf the revenue for Amazon’s Prime Day sale – this year estimated to be $4bn (£3.1bn) across 17 countries. Alibaba’s Singles’ Day volume again outpaced US online sales on Black Friday and Cyber Monday combined.
No wonder Forbes called Singles Day ‘a symbol of an unstoppable China’.
This should not be a surprise given that Alibaba’s mobile monthly user figure is almost 700 milhttps://www.forbes.com/sites/kenrapoza/2018/11/13/alibabas-singles-day-sales-record-a-symbol-of-an-unstoppable-china/#3537605cd163lion – almost the population of the US and Europe combined! However, Alibaba is less of an ecommerce retailer than Amazon; its business includes a marketplace, a cloud business, a financial services business, food delivery apps, supermarkets and even film production.
The run-up to this year’s 11/11 had lots of “countdown events”, including an interactive, live-streamed four-hour fashion show broadcast across 10 Alibaba platforms.
Stars including Mariah Carey and performers from the Cirque du Soleil also took part in a four-hour gala televised on Alibaba’s Youku video channel live from the Mercedes Benz Arena in Shanghai. Local stars like Jackson Yee from popular boy group TFBoys also joined in, sometimes even singing a song written for the event, aptly titled ‘Buy, Buy Buy’!
A screen displays the sales figure for the Singles’ Day at the Mercedes-Benz Arena in Shanghai on Nov. 11, 2018. Photographer: Giulia Marchi/Bloomberg
Why is Singles’ Day such a success?
To understand Singles’ Day, you have to understand three things about China.
Firstly, China went straight to mobile so the majority of the population is on mobile phones. In China, people now conduct their daily life without a wallet, cash or credit cards. There’s no need for that. All you need is your mobile phone, and you can use it for hiring a taxi, ordering food for lunch, booking travel, rating a restaurant, shopping, watching TV and paying your bills.
Second, you need to understand the concept of city ‘Tiers’. There are Tier 1, Tier 2, Tier 3 and Tier 4 cities in China. Tier 1 cities are the likes of Beijing, Shanghai and Guangzhou – essentially sophisticated and affluent mega-cities. Tier 2 cities are places such as Chengdu or Dalian: still big cities with 16 million+ people, generally made up of provincial capitals but still fast growing and with consumer behaviour similar to Tier 1 trends.
Tier 3 and 4 cities might be found in mountainous areas and are usually home to up to 5 million people. There may not be the same infrastructure as elsewhere, but everyone has a mobile phone and you can reach people across the nation through the mobile network. Again, the scale thing: there are about 130 Tier 3 cities and 400 Tier 4 cities!
What is hard to understand is that such consumerism is part and parcel of the everyday experience in China as the country’s middle class grows exponentially.
The final thing to understand is the scale and influence Tencent and Alibaba have in China. The vast majority of web activity in the country happens through proprietary applications run by Tencent and Alibaba. The two dominate digital life in China and are an effective duopoly. Alibaba is known globally for it B2B ecommerce platform, Alibaba.com, as well as the Tmall and Taobao brands (think eBay, Paypal and Amazon combined, with TMall for consumers, and Taobao for consumer to consumer).
Alibaba’s rival Tencent owns WeChat, which has 1 billion+ users, as well as its older messaging app QQ. WeChat is like Facebook, Twitter, Spotify, WhatsApp, Paypal and YouTube, as well as gaming and reading, coming together in one ‘superapp’. Both platforms are a way of life; WeChat was recently called the ‘operating system of China’.
For marketers, these internet giants increasingly control the interfaces to consumers across multiple touchpoints. And they own the data that comes as a result of those interactions. The proposition to marketers who wish to access customers in China is dead simple: deal with us directly if you want to reach your audience; make it on mobile and you can deal with the whole country.
Who is taking part in Singles Day?
Almost half (46%) of Singles’ Day consumers were born in the 1990s, not surprising given that 28% per cent of China’s 800 million online population are aged between 20 and 29. What is hard to understand is that such consumerism is part and parcel of the everyday experience in China as the country’s middle class grows exponentially.
These consumers are also less concerned about privacy: data from Alipay shows that during this year’s online shopping spree, 60% of total payments were done by users scanning their fingerprints and faces.
For brands, Singles’ Day provides a platform for new product launches. 11:11 has such significance that brands start planning nine months out, with some integrating the event into three-year strategic plans.
More than 180,000 brands took part in the Singles’ Day event, with more than 40% of consumers making purchases from international brands. Japan, the US, South Korea, Australia and Germany are the top five countries selling to China while more than 60,000 international brands including Adidas, Bose, La Mer, L’Oréal, Mac, Mattel, Mondelez, Nike, P&G, Shiseido, Siemens, Unilever, Uniqlo, Wyeth and Zara took part.
Lancôme, the number one top-grossing beauty brand on Tmall during the 24-hour period, promoted one of its several special-edition beauty boxes using Wang Junkai of the ultra-popular boy band TFBoys.
What can retail learn from Singles Day?
1. Creating a new retail experience
The 11:11 Global Shopping Festival provides insights for the rest of retail in how to build excitement and engagement with today’s consumers. Alibaba sees normal high street retail as dull and Singles’ Day is part of a shift by Alibaba from transactional selling to experiential shopping.
Consumers don’t just watch and buy, they take part via Alibaba’s Taobao or the Tmall app on their phone. Audience and viewers are asked to vote, play games to win special offers and shake their phones to earn credits and reveal deals. There are interactive treasure hunts and augmented reality games. The blend of retail and entertainment, innovation and raw commercial options is totally different; it’s not exactly the John Lewis Christmas advertisement!
2. The Blurring of Online and Offline
Hema Retail outlet, China, an example of ‘New Retail’ from Alibaba
Jack Ma, the founder of Alibaba, coined the phrase “new retail“ to depict the increasingly blurring boundaries between the online and offline shopping world. The company put this into action with the purchase of the Hema supermarket chain (now called Freshippo) and is now rapidly expanding it.
Alibaba set up 60 new retail-powered pop-up stores across 12 cities and 52 shopping malls in China to trial an augmented reality lipstick. And 100,00 stores in 334 cities were converted into “smart stores” to bring a range of new retail experiences such as facial recognition payment.
3. Integrating services seamlessly
Alibaba has made Singles’ Day total integrated. It uses Tmall, Taobao, services platform Ele.me, Rural Taobao (for rural areas), Ling Shou Tong – the Alibaba platform for convenience stores in China – all hosted in AliCloud and using the Cainiao Logistics network.
4. Big Data Insights
Alibaba supplies data and insights to brands to help create new products and packaging expressly for Singles’ Day and get access to the data from their sales to be mined for the other 11 months of the year. As an added bonus, Alibaba uses real-time data visualisation in the media centre at the Singles Day Gala Event to show sales results!
What’s next for the Global Shopping Festival?
They have a nickname in China for online shopping addicts: ‘hand-choppers’ – online shopping addicts who promise to chop off a hand if they continue to buy things they don’t need! But there is no sign of the growth of ecommerce slowing. Indeed, this year Alibaba extended Singles’ Day across South-East Asia and gained significant sales in Chinese expatriate communities such as Australia and the US. And planning for 2019 has already begun.
Next year’s event is significant and symbolic because it will be the 11th anniversary of 11/11. Alibaba has already stated its ambitions: “The peak traffic of Singles’ Day in each year will turn into that for a normal day years later,” says Alibaba’s Jack Ma. This year’s 11/11 was “just the beginning,” and the message displayed on the on the media centre stage read: “Yesterday’s best is today’s starting line”.
This event is only going to get bigger and draw in more of the world’s population. Brands need to have their strategy for it in order if they want to reap the benefits.