Stay 'awake' for Singles Day's spending spree

It took only three minutes for gross merchandise volume to hit 10 billion yuan (US$1.5 billion) for Tmall’s Singles Day shopping festival while last year it took nearly seven minutes to fly past that threshold, making observers more certain that this year’s November 11th gala will set a new record for the highest retail sales figure within a 24-hour period. 

Last year's Singles Day sales totaled 120 billion yuan, and this year, more participants from both online and offline worlds are joining the shopping bonanza. 

Tmall’s Gala Celebration to kick off the 24-hour shopping spree attracted more than 40 million viewership in the first two hours. 

As many as 270 million yuan worth of coupon were given through Taobao and Tmall’s smartphone applications during the four-hour long gala celebration which was staged at Shanghai’s Mercedes Benz Arena on Friday night. 

An eight-minute clip of Gong Shou Dao, a short film featuring Alibaba chairman Ma and 11 of the world’s well-known martial art practitioners and action stars, was also released during the Gala Celebration. 

Ti Gong

Market watchers say the event is not only a treat for shoppers but also a good chance for the retail industry to optimize consumers' shopping experiences, whether they're buying online or off.

Online retailers are finding effective ways to track consumers' offline purchasing behaviors, which is not easy since brands who already have a presence in the physical retail space sometimes prefer to keep customer data to themselves, Jack Chuang, a partner with OC&C Strategy Consultants, said.

The most direct way to get customer info is to invest in offline businesses, which Alibaba has pursued in recent years, he noted.

Market research firm Mintel's latest study shows that business-to-consumer (B2C) online retail is expected to contribute more than 60 percent of total e-commerce sales in 2017.

Total B2C and consumer-to-consumer (C2C) online retail sales in China are expected to reach 6.4 trillion yuan (US$963 billion) by the end of 2017, growing nearly five times over the past five years.

Matthew Crabbe, Research Director for Asia Pacific at Mintel, forecasts that the contribution of online spending out of total retail spending would barely change in the next two years, despite potential new growth from rural consumers, and strong growth being seen in sectors such as food delivery services.

"One of the reasons is that consumers are increasingly buying experiences and services online rather than physical goods," he said. 

Store functions will increasingly incorporate online-enabled, front-of-store consumer touch points for selling goods and providing other customer services, even those that are not related to the retailer’s core business, he added.

One of the latest attempts is from JD.com's on-demand delivery affiliate JD Daojia, which launched its smart vending machine called "GO" earlier this week, set to cover more than 10 domestic cities by the end of this year. 

With facial recognition technology, it also leverages off JD's supply chain capability to target consumers in office buildings, community centers, gas stations and entertainment facilities. 

The Kanta Worldpanel study shows that as one of the most important shopping occasions, Singles Day not only attracts more people to spend online, but they also buy bigger items in every single purchase. 

During November, the number of online shoppers is 56 percent higher than the annual average figure, the study says, with beauty products, personal care and home cleaning items the fastest moving consumer categories.

IKEA also started a three-month trial operation from November 7 at its Xuhui store, offering courier services for just 9.9 yuan (US$1.5) on goods weighing less than 10 kilograms.

More than 500 Uniqlo stores around China already began offering discount prices on selected items today, consistent with their pricing on Uniqlo's Tmall stores, as the apparel retailer pushes forward its online and offline synergies.