What Singles Day can tell us about how retail is changing in China
Contents
Paper
- Title: What Singles Day can tell us about how retail is changing in China
- Authors: Lambert Bu, Anne Kronschnabl, Kelly Ungerman, Daniel Zipser
- Year: 2018
- Link: What Singles Day can tell us about how retail is changing in China
- Tags:
- Open Access: Yes
Notes
Why
- Singles Day is the largest single-day sales even over the world, and its influence is becoming wider.
- Biggest sales
- $45 billion purchased made in 24-hour period.
- Three times of 2018’s Black Friday and Cyber Monday online sales combined.
- More than 90% purchases happened on mobile devices, which were only accounted for 34% of that on Cyber Monday.
- At least four other similar companies as Alibaba launched single-day promotions, but Alibaba captured 68 percent of total sales.
What & How
Single Day’s growth is slowing and will need to further evolve
- Past five years average of almost 50%, past two years 44%, this year 25% (more in line with retail growth in China).
- Solution:
- Tap new markets outside China
- Leverage complementary events in more creative way. 🌰e.g. “See Now, Buy Now” fashion show in Shanghai’s Mercedes-Benz Arena.
- Set forecasting goals more realistic
- Launch promotions on other holidays
Discounts play a big role in Singles Day sales
- Biggest discount drove additional market share. 🌰e.g. parent and baby products: 6 to 7 → 18 to 19 percentage; skin-care and cosmetic brand: 3 to 5 → 12 to 15 percent.
- Different discount form. 🌰e.g. direct online price cut, coupons which can be used both online or real stores, promotions offered during presale events, platform discounts offered by Tmall.
- Discount of Alibaba’s subsidiaries. 🌰e.g. Ele.me, social media, music streaming and travel apps.
- Easily trap into unprofitable sales especially without deep cash reserves.
- Solutions 1: Pair more modest discounts with free gifts.
- Solutions 2: Shift the emphasis towards to new products (🌰e.g. Dyson used social media to launch its new Airwrap hair-curling product, Budweiser sold special package of beers, Johnson & Johnson introduced new flavored Listerine).
Singles Day is spilling over to physical stores
- Alibaba made sure offline stores offer discounts as well. 🌰e.g. 100 Hema supermarkets, 222 Easyhome furniture and home-improvement stores.
- Individual brands also used discounts and strategies such as click and collect to drive additional sale in store. 🌰e.g. Luckin Coffee – “Buy 1, get 2 free”, Xiaomi – same discount for online and physical stores,
- Pros of ominichannel sales
- Give customers the seamless integration of online and offline experience.
- More meaningful services can be served in offline stores.
Rooted in China, Singles Day is an increasingly global event
- More than 19,000 multinational brands participated in Singles Day. Overall growth 24%, imported product growth 63% in Tmall. 🌰e.g. MartiDerm, Moony, Dyson, Schiff.
- Singles Day fanned out over the world. 🌰e.g. Lazada (almostly 91% owned by Alibaba) launched Singles Day in several Southeast Asia countries and its sale during the first hour sevenfold over last year. Shopee (leading online shopping platform in Southeast Asia and Taiwan) grew its total customer orders by 4.5 times on Singles Day.
- AliExpress partnered with EL Corte Inglés department store to create more than 2,000 click-and-collect pickup locations. And AliExpress’s total sales on Singles Day grew 40 percent.
Conclusions
If any international brand wants to develop in Asia, build brand engagement and craft unique experience with customer, it has to participate Singles Day.
Author Octemull
LastMod 2019-01-20