This post was written by Sarah Boesveld.
Most of the Western world knows November 11th as a day to honor and remember veterans. In China, the day has a different social and cultural significance—one that has become the biggest online shopping day ever, allegedly bigger than Cyber Monday and Black Friday combined. “Within 24 hours, people in China have spent more money to buy stuff than entire countries make in a year,” Business Insider reported after Singles Day this year. Say what?
In just a few years, Singles Day (or 11.11) has grown into a massive, global, cyber retail phenomenon—an ingenious marketing concept built on the idea that it’s more than OK to treat yourself, especially before the holiday season demands you buy for everybody else. This year’s Singles Day raked in $38.4 billion USD for Alibaba, the world’s largest ecommerce retail company and founder of the sales festival—smashing the $30.8 billion record set the year before by about 25%. The company even threw a glitzy kickoff gala, which included a performance by pop icon Taylor Swift and a light show that apparently took 300 people to operate.
Singles Day is a glimpse into the future of ecommerce: There’s a lot to learn from the way the manufactured holiday has blossomed into an extreme, nearly instantaneous moneymaker—lessons you can apply to your own growing business.
What is Singles Day?
Singles Day wasn’t always a shopping bonanza. In fact, it began in 1993 as a kind of anti-Valentines Day—a day for single people to positively acknowledge their lack of relationship status. In Chinese numerology, numbers carry a ton of significance. While the number one can signify a win (ie. first place), it also represents loneliness or a solo relationship status. The holiday started at Nanjing University as a way for students to celebrate their singledom (it was founded by four single young men, which is why it was originally called Bachelor Day). It’s also known as the “bare sticks holiday” because of the way four ‘1s’ appear in the calendar.
The holiday caught on in China, particularly among young people, and so in 2009, Alibaba Group founder Jack Ma harnessed the day’s moneymaking potential by offering mega deals to swarms of shoppers.
How is Singles Day different from Black Friday and Cyber Monday?
For one thing, it’s way bigger. More than 4.14 million people shopped online in 2018 from Thanksgiving Day through Cyber Monday, which follows that holiday, according to the National Retail Federation in the US. Small potatoes compared to Singles Day, which in that year made more than $4.68 billion in sales within 10 MINUTES. While Black Friday and Cyber Monday are long-established sales days across the Western world and participated in by countless brands and brick-and-mortar stores, Singles Day is concentrated primarily within ecommerce marketplace Alibaba and its affiliate sites, Taobao (consumer to consumer) and Tmall (business to consumer)—for now. Tmall is actually the driver of Singles Day, and more than 200,000 brands on its site offered deeply discounted items this year. Despite the concentration of sales to these major outlets, the event has grown to four times the size of Black Friday and Cyber Monday, which is unheard of. Another major difference, though? You’re unlikely to find Western brands such as Apple, although you can increasingly find products from companies including Dyson and Spanish beauty company MartiDerm.
Why is Singles Day so successful?
It probably helps that Alibaba is the world’s biggest ecommerce company with sales outpacing eBay and Amazon combined—and its sales are bottom of the barrel cheap. The sales platform and its affiliates sell wholesale items as well as direct to consumer and it also allows shoppers to sell to one another as well. The Singles Day sales are complete steals: During Singles Day this year, Alibaba had Bluetooth earbuds on offer for $1.50–$6.90 for TWO pairs.
The incredibly low prices of these products must have something to do with the sales platform’s wild Singles Day success. A post on Quora by a merchandiser who uses Alibaba said the site is so cheap because of the low cost of labour in China, the way the site sells in bulk (why not buy two pairs of Bluetooth earbuds if they’re only $6?), the low cost of electricity and less consumer targeting. Why is there less consumer targeting? Because the site is mostly set up to sell to merchandisers, who are stocking their own shops with these products. That said, Alibaba does have a Wholesale Market that sells products to individuals for personal use, as well as Aliexpress.com — both participants in Singles Day.
There is, however, some skepticism about the sales reporting Alibaba is claiming related to Singles Day. According to The New York Times, “The big numbers that Alibaba likes to show off on Singles Day are not a perfect gauge of how all this might be affecting middle-class China’s appetite for retail therapy.” Alibaba reports gross merchandise volume, which represents the total value of orders on its platforms, the Times says—something that, in actuality, is pretty hard to track because, the Times reports, there is no standardized way of measuring it.
What can your online retail business learn from Singles Day?
Singles Day reveals the changing nature of ecommerce. First things first—you best be ready to make those sales over a smartphone. McKinsey reports that more than 90% of sales in 2018’s Singles Day happened over mobile devices, compared with 34% of purchases on Cyber Monday. It also illustrates a certain willingness to go deep on discounts for a single-day event to drive customers to your site. On Singles Day 2018, parent and baby product prices were slashed 33% on average, which resulted in 18–19% of sales in China, versus 6–7% on a normal day, according to McKinsey. That also helps establish the day as something for shoppers in certain market categories (like parenting) to mark that date on their calendar and to be ready with their credit card. McKinsey does, however, warn that deeply discounting products is harder for smaller companies to do. “One way to avoid unprofitable sales is to pair more modest discounts with free gifts or shift the emphasis toward product launches.”
Participation in Singles Day is quickly becoming a requirement for any international brand interested in tapping the massive Chinese market. Start folding the event into your growth plans if you’d like to expand into that global ecommerce goldmine.
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