By Charles Whiteman, SVP Client Services, MotionPoint
The biggest online shopping day of the year — November 11, China’s Singles’ Day — has come and gone, and the results practically defy the imagination.
Indeed, most Western shoppers can’t comprehend the scale of this e-commerce sales event. Black Friday and Cyber Monday are bargain-crazy bonanzas for U.S. retailers; last year, those days generated a combined $4 billion in sales.
By day’s end, sales had eclipsed $14.3 billion — and that was solely on online marketplaces owned by Alibaba Group Holding Ltd. Additional billions generated at competing sites, like JD.com, weren’t included in the total.
What’s behind this shopping phenomenon? Bargain basement deals. On Singles’ Day, prices drop by 50% or more, for products ranging from televisions to toilet paper. Consumers buy most of these products at Alibaba-owned sites, such as Tmall.com.
Last year, these online malls generated $9.3 billion in Singles’ Day-related sales, a 60% increase over 2013. This year’s sales represented another 60% year-over-year increase.
Chinese brands used to dominate Singles’ Day sales. Not anymore; Western companies are expanding into the market, and getting a piece of the action.
This year, more than 15,000 global companies participated in Singles’ Day. Most sold their products in virtual marketplaces like Tmall. A who’s who of brands were on hand, including Macy’s, Estée Lauder, Nike, Apple, P&G, Unilever, and others. European companies also contributed, including Zara (a Spanish fashion retailer), luxury store Burberry, and many more.
Not all Western companies sell on Tmall, however. Many operate e-commerce websites, localized for the Chinese market.
Some of these companies are MotionPoint clients. Based on our analysis, these sites also saw surges of traffic and transactions on Singles’ Day, too. We noted these, and other, significant increases on November 11, compared to the YTD average:
- Traffic grew by an average 92%, compared to 82% in 2014
- Conversion rates increased 122%, compared to 10% in 2014
- Sales skyrocketed 1,384%
Our Chinese market experts suggest that several product sectors will become increasingly popular on upcoming Singles’ Days. This includes the mother and baby product categories.
China recently rescinded its “one-child rule,” allowing families to have two children legally. This will soon result in an ongoing surge of maternity and childcare product sales especially among Western brands, which Chinese consumers prefer. (In fact, Kimberly-Clark’s Huggies products were top-sellers during Singles’ Day 2014.) This represents a growth opportunity for savvy maternity and baby brands.
This move might take some pressure off existing regional brands. Australians are currently experiencing a Singles’ Day baby formula shortage, since millions of Chinese consumers purchased an Aussie-made formula en masse.
Western brands may be experiencing a Singles’ Day sales lift in China, but stateside retailers, hungry to generate U.S. interest in the shopping holiday, aren’t faring so well.
Despite support from such retail powerhouses as Walmart, American consumers don’t seem to care about Singles’ Day. In the U.S., November 11 sales totaled $1.4 billion, a 14% increase from 2014 to 2015. That’s not bad, but it’s well below the $3 billion analysts project Cyber Monday will deliver this year.
We have a unique perspective on U.S. Singles’ Day celebrants. We operate a localized Chinese website for a U.S.-based retailer that promoted Singles’ Day 2015. While its promotions generated a relative increase in U.S. sales, the lift couldn’t compare to the impact we saw on sites on mainland China sites.
We also operate a localized Spanish site for another retailer that promoted Singles’ Day to U.S. Hispanics. The site didn’t see an increase in sales at all. This trend may change, but for now, we believe Singles’ Day is a uniquely Chinese e-commerce event, resonating with shoppers from some cultures more than others.
While it may seem that Singles’ Day is a formal holiday, it isn’t. The day was created by 1990s Chinese college students, who celebrated it as a kind of anti-Valentine’s Day. In 2009, Alibaba branded the day as “Double 11,” and offered tantalizing online shopping deals, targeted at single. The rest is a marketing success story.
This year, Chinese anticipation for Singles’ Day was higher than ever. The hashtag #Double11 trended on Chinese social network Weibo for more than a month before November 11, generating billions of impressions.
This year, 80% of all Chinese online shoppers participated in Singles’ Day. They generated an astonishing 120,000 of orders every minute. According to Alibaba, nearly 70% of those orders were placed on mobile devices, compared to about 40% in 2014.
And while Singles’ Day’s $14+ billion windfall is certainly jaw-dropping, it still represents a mere fraction China’s online buying power. Last year, Chinese consumers spent more than $450 billion online. By 2018, annual spending will grow to $1 trillion.