by Ker Zheng
As we enter the month of October, brands in China are starting to gear up for Singles Day (November 11th) promotions.
As in past years, Singles Day is the biggest retail event of the year, and many brands can obtain over half of their annual sales from November alone because of this. Last year's Singles Day saw Alibaba's platforms, Taobao and Tmall gross merchandise value reached $38.4 billion, a record-breaking number. We break down six things that brands should know about Singles Day.
1. Brands have the opportunity to get "free traffic" from platform promotions
Tmall, JD.com, and all the other e-commerce platforms will put up pages that aggregate promotions from different merchants to drive traffic and sales. These pages are often on Tmall's front page or category pages, and have the ability to generate lots of traffic and sales.
Brands have to apply to participate beforehand. The one downside to participating in these platform promotions is that brands are expected to discount their products heavily, for example a brand might offer three bottles of shampoo for the price of two.
2. A lot of brands don't make money on Singles Day
Generating sales is one thing, but generating a profit is another thing. Oftentimes the discounts on Singles Day can be as high as 50% or 60%. And brands have no choice but to follow this trend because everyone else is doing it.
But brands shouldn't despair. A lot of times customers will come back to your stores in the following months and make more purchases, sometimes even at the full price.
Brands can even use retargeting ads on Tmall to follow customers that have browsed items and didn't make a purchase that time around. So brands should look at Singles Day as an investment in growing brand awareness and putting the brand on the map.
3. Other holiday promotions might be better and more profitable for brands
If you really are under pressure to generate a high ROI for your marketing spend, then it might be better to reserve your ad spend and KOL resources for another holiday such as Black Friday (cross-border e-commerce imports are popular for this holiday) or Double Twelve (Dec 12). For these holidays, there is less competition for ad inventory and KOL resources.
4. Demand can spike dramatically on Singles Day
Singles Day is bigger than Black Friday in the US or Amazon's Prime Day - much bigger.
Think of it this way - some customers have been holding off on e-commerce purchases for the last two months just so they can save their wallet for Singles Day. On the day of the big sale, that pent-up demand gets released all at once.
There are many cases in which platforms and brand websites have crashed or sold out of inventory in the first critical hour of Singles Day. So brands should remember to stock ample inventory in advance and make sure their supply chain operations are in order.
5. Singles Day is now longer than ever
This year, Singles Day promotions are starting as early as October 20th. This is because there are so many players involved with Singles Day that in the past, platforms and brand websites have crashed. Tmall wants to make it fair for all of the brands that participate, not just the F500 brands that dominate ad spend.
So now you'll see pre-sales beginning on October 20th - customers will be able to buy some smaller products early, or place deposits for sales on bigger items so that they are guaranteed access when the actual promotion starts.
6. Livestreaming will play an even bigger role this year
Last year's Singles Day was a landmark event for livestreaming. Alibaba's Taobao Live drove 20 billion RMB in sales through livestreaming.
This year will be even bigger for livestreaming, because now all of the major platforms have adopted livestreaming capabilities - JD.com, Kaola, Little Red Book, WeChat, Douyin, Kuaishou, etc. Expect costs for KOL hosts to go up substantially this year.