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Consumer frenzy turns Singles Day global

CHINESE consumers will be filling their online shopping carts with everything from clothing to toothpaste today during the world’s biggest single retail sales event.

It’s Singles Day, a folk holiday said to have originated at Nanjing University in 1993 as a day for unmarried people to get together and party. The date — the 11th day of the 11th month — has four “ones” symbolizing singles.

It was a rather innocuous day until e-commerce giant Alibaba turned it into a marketing extravaganza seven years ago.

What started as a 24-hour sale with 50 percent discounts and promotions has exploded into a marketing blockbuster stretching beyond just one day and even beyond China’s borders.

In last year’s Singles Day, Alibaba retail sites Tmall and Taobao attracted online orders valued at 57.1 billion yuan (US$9.05 billion), setting a one-day world sales record.

Alibaba has rebranded its Singles Day event as the Global Shopping Festival as it seeks to draw in more international merchants and shoppers. Indeed, the success of Singles Day is fostering whole new trends in online commerce strategy.

“Although price is still the most important factor in online shopping decisions, its importance is waning and brands need to provide better service and purchasing experience,” said Siew Ping Lim, CEO of media agency Zenithmedia China.

She said vendors should not forget the social aspect of Singles Day and should provide ways for friends to share the joy of shopping.

Zenithmedia’s research shows that most consumers don’t focus on specific products during sales events like Singles Day. Instead, they have a rough idea about product categories that might interest them. That means vendors need to work harder to attract potential buyers.

And as buyers do their homework about price and quality, sellers have to stay one step ahead.

“I think it’s everyone’s nature to look for good deals during such a massive shopping festival,” said Shanghai college graduate Rachel, who asked that her surname not be used.

She said she found the discount price of a Japanese shampoo on Tmall’s flagship online store close to the price available in local cosmetics and personal care chain stores.

“I ask around with my friends to find out what discount items are worth buying,” she added.

New brands

More than one third of consumers surveyed said they are willing to try new brands, signaling the importance of offering samples.

Hangzhou-based social commerce application Mogujie has teamed up with Japanese personal care and cosmetics review website Cosme to introduce customized cosmetics packages for shoppers ahead of the Singles Day event.

Yue Xuqiang, co-founder of Mogujie, said the collaboration will help diversify product offerings with more tailor-made products or limited editions to differentiate from mass merchandise sold on large platforms such as Tmall.

“Retailers are trying to compete on a lot of fronts apart from just offering low prices,” said Xu Ruyi, head of research at Mintel China. “Alibaba, for example, is focusing on global offerings and introducing more payment options.”

Many buyers don’t wait for the day itself to indulge in bargains generated by Singles Day.

“It’s always a good chance to buy winter clothes and personal care items for myself and for the family,” said a Shanghai mother in her early 30s surnamed Xu, who said she had already spent nearly 1,500 yuan on pre-ordered items. “Pre-orders mean I don’t have to stay up until midnight to grab discounted items before they are sold out.”

One of Alibaba’s main focuses this year is imported goods after the company kicked off Tmall Global as a new buying channel.

It’s working with vendors from 25 countries with 5,000 overseas brands. By the end of October, pre-sale transactions of nearly 50 overseas merchants, including Germany’s Metro, the US’s Costco, Thailand’s Nittaya and Japan’s Laox, surpassed 5 million yuan.

“We view it as a good chance to build a trading platform for buyers and sellers as we seek to serve 2 billion global consumers in the next decade,” said Daniel Zhang, CEO of Alibaba Group.

Albert Heijn, a Dutch supermarket chain, started selling about 100 imported products in late October and most of the pre-sale items have already sold out.

Hanneke Faber, CEO of Ahold Online, which operates Albert Heijn’s online businesses, said it chose to gain a foothold in China by working initially with Tmall Global because of its size in the online shopping sector.

US cranberry drinks producer Ocean Spray has also joined the shopping festival with an official Tmall store.

“Opening a flagship store on Tmall Global places us in the center of the largest consumer base in the world,” Ocean Spray President Peter Wyman said in a statement.

As of November 5, pre-sale orders for nearly 8,000 packs of dried cranberries had been placed.

Singles Day isn’t only about urban shopaholics. Alibaba, in a bid to attract rural and small-city consumers, has invested in logistics infrastructure in about 6,000 villages in 27 Chinese provinces

As of October 20, down payments on Singles Day pre-sale orders reached more than 190,000 in rural regions of the country. Online buying in smaller cities jumped 44 percent in the first three quarters of this year, surpassing growth in large metropolitan areas, according to consumer research firm Kantar Worldpanel. The figures show plenty of room for further growth.

Alibaba is also working with offline retailers and social networking sites to extend its marketing reach. Alibaba holds 31.4 percent of Weibo, the popular social networking site of Sina.com.

In August, Alibaba announced it would purchase 28.3 billion yuan worth of shares in domestic home appliance and electronics retailer Suning Commerce Co, allowing both companies to share online and offline marketing. Suning also spent 14 billion yuan to acquire 1.1 percent stake in Alibaba.

Suning will provide electronic appliances repair and maintenance at its more than 1,600 bricks-and-mortar stores around the country for shoppers on Tmall. It will also offer trade-in services for smartphones and home appliances on Tmall during Singles Day.


 

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