Drapers looks at the rise of China’s shopping phenomenon and how UK retailers get ready for it.
In just seven short years, Chinese giant Alibaba has grown Singles’ Day into an ecommerce extravaganza. Launched in 2009 as an ode to Chinese singletons, the day of discounting, which falls on 11 November every year, is now bigger than Black Friday and Cyber Monday combined. During last year’s event, Chinese consumers spent £9.4bn on Alibaba platforms, including online marketplace Tmall – clocking up £5.9bn worth of sales before midday.
Reluctant as UK retailers might be to embrace another discounting event so close to Black Friday and the festive season, Singles’ Day is becoming increasingly important. A record number of UK shoppers took part last year and the value of transactions made on cards during Singles’ Day was up 251% on 2014, payment processing provider Worldpay reported.
Mountain Warehouse launched a storefront on Tmall shortly before Singles’ Day 2015. The outdoor retailer’s founder, Mark Neale, says it has focused on its social media strategy to ensure a successful day this year.
“Singles’ Day preparation involves a lot of promotional activity across Tmall’s social media channels and outside of Alibaba platforms,” he tells Drapers. “In preparation for this year, we’ve also ring-fenced significant stock in a bonded warehouse in country. With this in place, we are able to meet demand and offer a high level customer experience through prompt deliveries, which is essential for the all-important customer reviews.”
Retailers need to prepare for Singles’ Day as far in advance as possible.
Meifang Chen, international business development manager, Alibaba
UK retailers with a presence on Tmall must test their platforms and back-of-house systems extensively to prepare for the onslaught of Singles’ Day, says Alibaba’s international business development manager Meifang Chen. “Retailers need to prepare for Singles’ Day as far in advance as possible. Anything you do on the day itself will be multiplied 10 or 20 times. That can be a good thing if it’s sales, but if it’s a logistics challenge, problems will multiply very quickly.
“They need to be testing and testing platforms to ensure everything goes smoothly when dealing with tens of thousands of orders and need to be sure they have the right technology to efficiently serve customers.”
Trish Young, head of UK business consulting for retail and consumer goods at consultancy firm Cognizant, agrees that logistical challenges can scupper UK retailer’s success on Singles’ Day: “Alibaba is investing heavily into logistics in China because it is such a huge challenge. There’s been so much investment in the past four or five years, because China has struggled to handle the amount of ecommerce coming through the country. Retailers in China need to look at sharing resources, like warehouses and lorries, to meet demand.”
Not just a discounting day
However, Chen is keen to stress that Singles’ Day is about more than just discounting. Alibaba has invested heavily in marketing, and kicks off Singles’ Day with a huge gala streamed on China’s equivalent to Youtube, Youku. Celebrities including actors Kevin Spacey and Daniel Craig both made appearances last year in a bid to help Alibaba draw in an international audience, and 2016’s festivities are set to be headlined by singer Katy Perry.
“Singles’ Day is an opportunity for brands in China to interact with consumers and although of course there will be discounts, we’re expecting this year’s event to be driven by full-price items,” says Chen. “There’s a huge amount of international brands on trading platforms like Tmall who don’t have an offline location in China and Singles’ Day gives them a chance to promote their brand in an interesting way. This year, retailers like [US department store] Macy’s are using virtual reality to connect with customers.”
For British brands already in China, Singles’ Day is becoming an increasingly important part of their calendar year.
Brian Bourke, vice president of marketing, Seko Logistics
Alibaba founder Jack Ma has previously said he expects Singles’ Day to become a global holiday in the next five years. However, Brian Bourke, vice president of marketing at Seko Logistics, argues there are several barriers to the concept becoming widely adopted by UK consumers and retailers.
“For British brands already in China, Singles’ Day is becoming an increasingly important part of their calendar year. However, there are a lot of questions to answer before UK retailers leverage the day for promotions, not least because 11 November is Remembrance Day in the UK – and because of the proximity to Black Friday.”
As more UK brands attempt to break into the huge Chinese market, Singles’ Day will become increasingly important. Retailers need to be armed with watertight logistics, clever marketing plans and in-depth knowledge of Chinese consumers to make the most of the world’s biggest shopping day.