November 11 will see the largest, busiest, and most consequential shopping day in the world: China’s Singles' Day.
Singles' Day started as a campus social activity at Nanjing University in 1993, allowing singles to celebrate their status. Alibaba co-opted this as a Tmall (their B2C platform) shopping day in 2009. The rationale is that, somewhat like the U.S., China faces demographic trends that work against gift-giving and celebrations: smaller families, fewer children, later marriages, and more people living alone - more singles. Singles' Day is therefore marketed as a good day for a blind date or a singles' party.
The commercial logic of Singles' Day is that you don’t have to wait for a gift to enjoy something new or exciting. If you always wanted a big-screen TV, this is the time to buy it. This spirit is captured by a Chinese saying, “If you cannot be with someone you like, you can at least be with something you like."
And there is a twist to this year's Singles' Day: The founder and chairman of Alibaba, Jack Ma, has announced his departure from Alibaba, giving rise to rumors and speculation as to what this means.
Jack did not invent Singles' Day, but he sure created it as we know it today, so Jack's departure is one more reason why Singles' Day 2018 will break records. Here are five points to keep an eye on as the day draws near.
Scale: Single’s Day no longer just adds to your China strategy; it is the culmination of your China strategy. It defines consumer behavior and brand strategy in the market. Brands can spend six to eight months planning their Singles' Day activity, and that day could account for 25% of their annual sales. In 2017, Alibaba sales passed $25 billion and JD’s sales topped $19 billion, making it the biggest shopping day in the world, offline or online. China sells more online on Singles' Day than most countries do in a year. Only 5 countries sell more online in a year than China sells on that one day: China, of course, the U.S., Japan, the U.K. and Germany.
Consumerism as entertainment: Why does it work so well? For one, Tmall hosts a national television gala on November 10 with a countdown to the midnight start of Singles' Day. This is a Hollywood-style spectacle with loads of international stars (Daniel Craig and David Beckham are past guests) and historically captures an audience of 150 to 200 million viewers. This gala will be augmented by product launch events, live-stream shows, fan contests and demonstrations.
Consumerism as a group activity: Tmall and JD have established a virtuous cycle of collective consumerism. If a brand wants to participate in the Singles' Day promotion, offering the lowest pricing is mandatory. Inventory must also be guaranteed (back orders are not possible). So every Chinese consumer knows they will be receiving the best price possible. Even if you are not much of a shopper, you try to buy something on Singles' Day.
Trade friction: How will the current China-U.S. trade issues affect Singles' Day? Short answer: it won’t, at least not this year, because among other reasons, items had to be in Chinese warehouses by Sept. 1. Additionally, it is important to note that neither the U.S. nor China have taken the trade friction into broader political criticism or point-scoring. Notably, there have been no calls or movements in either country for a consumer boycott.
Good Gets Better: Expect an expansion of two key trends we saw last year: (a) More international activity. Singles' Day has caught on in Taiwan and Hong Kong, and is starting to see traction in Southeast Asia. (b) More O2O. Alibaba and JD have each made major strides in integrating their online system with their offline footprint. You might start with only a Tmall store, but you could quickly end up with a national distribution footprint.
Source: Forbes
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