China’s Singles’ Day online sales event, held every year on Nov. 11 and by far the biggest online shopping day in the world, is having a growing impact on international e-commerce.
“International brands came out in a much bigger way this year than in any past year,” says Nathan Isaacson, global senior manager of e-commerce for athletic footwear manufacturer New Balance, which has been participating in Singles’ Day since 2011. “This year we saw a level of participation, competition and dynamic deal offering that was unprecedented.”
Singles’ Day this year generated $38.23 billion in total sales, with almost 70% of that on Alibaba Group’s Tmall, Taobao and AliExpress marketplaces and more than 16% on rival JD.com. Singles’ Day sales this year grew 43% compered to $26.64 billion sold online on the day last year. $38.23 billion is more than 5.5 times the online sales of Black Friday and Cyber Monday 2016 combined in the U.S.
Not only were overall sales up, so was the number of international brands selling in China on Singles’ Day.
Alibaba reports that 60,000 international brands took part in the 11/11 event this year, up from 11,000 in 2016 and 5,000 in 2015. Alibaba does not break down overall sales by country, but said the U.S. was one of the top countries selling into China on the holiday.
Planning starts now
Most U.S. brands are in the throes of the 2017 holiday shopping season with Black Friday and Cyber Monday right around the corner, but experts say if those brands and retailers want to succeed on Singles’ Day 2018, they need to start building their presence in China now.
“If you’re in China e-commerce, you’re in a permanent job interview with your platform,” says Frank Lavin, CEO of ExportNow, referring to Alibaba’s Tmall marketplace and JD.com. ExportNow helps foreign brands sell on Tmall. “You’re always seeking to prove to the platform that you’re a worthy partner. If you have a brand manager on Tmall and you’re telling that brand manager you can hit $1 million on Fourth of July sales (on Tmall) and you hit 10% of that, that’s a tougher negotiation on Singles Day. This activity takes place throughout the year and Singles’ Day is the most pronounced,” he says.
Retailers must plan ahead on marketing and logistics if they want to succeed with Singles’ Day sales, Lavin says.
“Most Singles’ Day planning has to be done by the first of September because you have to work out your marketing agreement and budgeting activity with Tmall and JD,” Lavin says. “September is when execution starts.”
While Nov. 11 is the main event, Singles’ Day generally can be broken down into three periods.
The pre-sale period, which takes place in late October, allows a shopper to see the promotions that a retailer or a brand is offering, place products in her online shopping cart, and put down a deposit before processing the total payment on Nov. 11.
Then comes the pre-heat period, generally from Nov. 1-10, when retailers will roll out new promotions designed to get shoppers to add products to their cart, only this time they don’t make a down payment. Nov. 11 represents the culmination of the buildup and is when shoppers’ payments are processed.
“The three-phase nature of the 11/11 holiday is crucial to understand, and while those phases haven’t changed, the relative emphasis and the tactics within them have evolved dynamically, and that’s something brands have to work with Tmall on,” Isaacson says. “Our preparation for Singles’ Day is a full year of prep for the marketing, and the inventory planning, it begins as soon as we finish up shipping the items from the previous year.” Isaacson didn’t specify what New Balance does to prepare for each of the three individual phases of Singles’ Day or how the phases have evolved.
Social and mobile strategy
Don Zhao, founder of Chinese cross-border e-commerce service provider Azoya Group, says a retailer must be savvy on mobile and social media. Alibaba reports that mobile accounted for 90% of total sales on Singles’ Day, compared with 82% last year.
“In China, mobile commerce is intertwined with social media, such as Weibo and WeChat, Youku &
Tudou,” he says. “[Retailers need to] create and deliver dynamic campaigns across social networks, use audio and video content, and HTML5 games to make your marketing interactive and engaging to encourage customers to shop.” HTML5 refers to a type of programming language, and games built with it work on many kinds of devices, such as smartphones, tablets, PCs and smart TVs.
Zhao cites cosmetics retailer Feelunique as an example of a retailer that offered a particularly effective game.
“It was being promoted through Feelunique’s WeChat and Weibo account, it can be viewed and interacted with on a desktop computer, tablets and mobile phones,” he
says. “Feelunique’s social media followers can pick a color from different licksticks to color the model’s lips in 10s. Once completed the user will gain a coupon to purchase lipstick from Feelunique. This stimulates consumer to visit the company’s official website and purchase.”
Marketing programming for Singles’ Day is only one part of the equation, however.
Zhao says U.S. retailers and brands looking to make a splash on Singles’ Day 2018 need to position inventory and work with their cross-border e-commerce providers well ahead of time to make sure they are prepared for a drastic spike in web traffic and sales.
“Communicating with suppliers and carriers at least eight weeks in advance can greatly reduce the risk of inadequate stock volume and delayed shipments,” Zhao says. “Canceling or delaying orders due to product shortages or insufficient fulfillment resources could cause customers to feel dissatisfied by the shopping experience, which could damage your brand image.”