Singles Day: from a one-day wonder to a global phenomenon
The world’s biggest online shopping extravaganza — Singles Day on November 11 — is still more than a week away, but its tentacles are already reaching out to consumers in a pitched battle among cyber-sellers.
Singles Day is based on a folk holiday started by students at Nanjing University in Jiangsu Province in the early 1990s. The 11th day of the 11th month was chosen because the numerals signified four “sticks,” or single people.
On the date, students celebrated being unattached by treating themselves to dining out and splurging on merchandise they might not otherwise buy.
The folk holiday was subsequently seized by e-commerce giant Alibaba and popularized as the Double 11 Shopping Festival, a day offering massive online discounts. It went from strength to strength over the years in terms of size and revenue, evolving from a 24-hour wonder into a weeks-long retail spree.
In 2009, when Alibaba first staged the shopping event, 24-hour sales totaled US$7.8 million. Last year, the festival drew 268.4 billion yuan (US$39.5 billion) in sales. It has been setting new records every year.
“Bargain hunting is always fun and it’s a good chance to look at all the latest digital gadgets and skin-care lineup and at the same time to play virtual games to win extra coupons on Taobao,” said Crystal Jiang who plans to buy home decoration items.
The festival has gone from a China event to a global phenomenon, both in terms of buyers and sellers. For many brands, the festival is the single biggest money-spinner of the year.
Moreover, offline small merchants, like street stalls and neighborhood grocers across China, will be able to participate by connecting with consumers through Alipay’s digital lifestyle platform.
So what’s on tap for this year?
Some 14 million pieces of merchandise on Alibaba’s Taobao and Tmall will offer one form of discount or another, a 40 percent rise from last year.
Another e-tailer, JD.com. is promising more than 200 million goods at 50 percent discounts, along with 300 million new products.
JD has invited an array of celebrities and business executives to participate in "Live Super Night 2020" livestreaming sessions to promote sales of merchandise.
Consumers no longer have to sit up until midnight on November 10 to get in on the shopping frenzy. Presales are already underway.
Shanghai office worker Agnes Zhu said she's already paid out about 500 yuan in a down payment for facial creams.
"Since overseas shopping options are limited because of the novel coronavirus, it's a good chance to buy some quality overseas winter skin-care products," she said.
She's exactly the kind of shopper Alibaba hopes to target.
Tmall Global boasts that 2,600 goods imported from overseas will make their Double 11 debut this year.
Products include Proctor & Gamble’s Opte beauty machines, which digitally scan skin, analyze complexion and camouflage age and sun spots; Kao's Sofina est facial mask machine; and L'Oreal makeup line Urban Decay, which made its debut at last year's China International Import Expo.
China is the world’s largest consumer market, and online sales are playing an increasing role.
In the first nine months of this year, online retail sales rose 9.7 percent from a year earlier to 6.65 trillion yuan, according to the National Bureau of Statistics. Food and apparel comprised about 55 percent of the physical goods sold.
A recent Bain survey of 3,200 Chinese shoppers showed that about 40 percent of respondents expect to increase spending during this year’s Double 11 event. Only 20 percent said they would cut spending.
When asked about their preference, most respondents favored online purchases over shopping in physical stores.
Another two prominent segments in this year’s sales pitches are consumer electronics and health and wellness products.
In its Double 11 presale push, Suning's offerings include more than 100,000 products. The retailer operates both online and brick-and-mortar stores and the discounts are eligible for physical stores for the first time.
This year, one of its focuses will be home appliance discounts on electronic vehicles and the latest models of 5G mobile phones.
Some 400 company executives and 300 celebrities will join top livestreamers on Taobao to promote cosmetics, electronics, cars and even houses.
Singles Day’s transactions continue to smash previous records, but many shoppers don't look at the event as their only chance to grab a bargain and some find the overhype distasteful.
"It's a waste of time to have to sit through a four-hour livestreaming session of things I don’t want to buy while waiting to see the products I want,” said senior financial consultant Valen Lu.
She said she is turning a deaf ear to all the hype and concentrating only on what she wants to buy. She grumbles that she still needs to wait several days for an 800-yuan LCD display she ordered in the presale period.
JD kicks off its Double 11 sales in the first week of November to avoid a backlog in deliveries. Alibaba is following suit this year.
Jiang Fan, president of Taobao and Tmall, said a new sales window will be open from November 1 to 3. It’s designed to allow merchants better time for promotional activities.
This change comes as Alibaba is facing slower growth prospects and stronger challenges from rivals.
Shanghai-based Pinduoduo, the largest interactive e-commerce platform in the world, has announced an expanded plan to work with 5,000 original equipment manufacturers to help them sell to online shoppers.
Pinduoduo's number of active buyers and transaction volume more than doubled in the past 18 months.
The company said its future success in e-commerce relies on tracking shifting consumer trends, linking that demand with suppliers and helping foreign sellers understand the domestic market.
Chen Qiu, Pinduduo's vice president, is aiming for 100 million yuan in increased sales in the next five years.
Wu Bofan, a research adviser and financial commentator, said he thinks Chinese consumers are becoming more pragmatic.
"They no longer seek big brand names but rather good value for money," he said.
Those on limited budgets are buying things that bring small improvements to their daily lives, he added.
Alibaba's response to that is a dedicated app called Taobao Deals, launched in March this year to target price-sensitive shoppers. The company is vowing to cut distribution costs by offering factory-gate prices.
"Manufacturers are becoming more flexible in their response to consumer demands and are better equipped to handle unforeseen events like COVID-19,” said Jennifer Ye, consumer markets leader at professional services firm PricewaterhouseCoopers.
“It’s crucial for them to leverage consumer data and shopping preferences on digital platforms."
Chinese consultancy iResearch estimates the consumer-to-manufacturer market in China will more than double in the next two years to US$6 billion.
Taobao Deals offers factory-direct, less-well-known brands ranging from home-cleaning products to paper napkins. So far, more than 500,000 factories and 1.2 million production-capable suppliers have signed up to the platform.
As one analyst noted, success in e-commerce depends on collaboration of online retail platforms, offline retailers and brand companies — not just for 24 hours in November but in the 364 days that follow.
