November 29th, 2017; Smart Brief
As Americans prepare to savor the year’s best holiday sales opportunities, an even bigger sales extravaganza just took place in China: Singles Day.
Singles Day is China’s annual e-commerce event, which takes place on Nov. 11 (hence its nickname, "11.11"), and this shopping phenomenon inspires consumers to buy things for themselves -- especially if they are not currently in a relationship.
Singles Day 2017 certainly lived up to the massive marketing hype by smashing global sales records yet again. The event earned $38 billion in total sales, with $25.3 billion from Chinese e-commerce giant Alibaba alone, up 42% from last year’s total of $17.8 billion.
These results prove Single’s Day is the biggest retail event in the world -- and it’s only getting bigger. Singles Day 2017’s success also reflects the stark contrast between booming Asian markets and the contraction of retail markets in Western countries, including store closures, bankruptcies and consolidation.
China’s favorable market factors
To take advantage of growth opportunities abroad, an increased number of U.S. and global retailers have expanded into China through cross-border e-commerce.
Retailers around the world must understand the following emerging consumer and market trends, which have contributed to China’s retail expansion -- especially if they are considering entering China in 2018.
Proof cross-border e-commerce is hot
As a result of these market trends, U.S. and global retailers (and consumers) are paying more attention to Singles Day than ever before. While Alibaba accounted for 66% of total Singles Day sales, we certainly see the theme of greater globalization of this sales event, as 2017 is only the second year that international goods have been available for sale in China on Singles Day. This year, on Amazon China’s website, 7.3% of sales came from overseas, compared to 5.4% of sales on Tmall (Alibaba’s online marketplace) and 4.9% of sales on JD.com (another Chinese e-commerce powerhouse).
Early results show U.S. and foreign retailers don’t need to have a gigantic marketing budget like Amazon or Alibaba to succeed on Singles Day.
One American retailer selling online in China hoped to achieve sales of 300 orders per day by December 2018; instead, the company shattered that goal, earning more than 1000 orders in a day, ahead of Singles Day. The retailer prepared well by stocking bestselling products in its Hong Kong warehouse for faster delivery; these few SKUs accounted for 15% of Chinese Singles Day orders. The campaign also boosted sales growth by 276% and the number of new users by 200%.
Key success factors in China retail
To succeed in China, especially on Singles Day, U.S. and foreign retailers need to invest in product placement; proactive and abundant stocking; competitive price offers; and fast, effective logistics.
In summary, due to multiple advantageous market conditions in China’s retail market, more U.S. and global retailers are paying attention to, and participating in, Singles Day promotions using cross-border e-commerce. If your company plans to enter China in 2018, consider how you will adapt to these market trends to win in China’s retail market -- and potentially earn explosive sales on Singles Day 2018.