Singles’ Day is the biggest shopping day in the world led by the Chinese ecommerce giant Alibaba, taking place every year on the 11th November. As the day is right around the corner, brands and retailers are preparing their offerings in anticipation of the momentous event. With Singles’ Day up to a record $115 billion last year in 2020, will 2021 make a new record? How has shopping changed from 2020 (almost entirely online due to lockdowns) to 2021? What should brands and retailers take note of this year? What are the best practices for them to succeed? This article will take a closer look at Singles’ Day, first defining what it is before exploring the wider questions as well as key insights and takeaways for sellers and retailers alike.
Singles’ Day, also known as Double 11 and originally called Bachelor’s Day, is an unofficial Chinese holiday and shopping season that celebrates people who are not in relationships. As mentioned, the holiday has become the largest day in the world for physical retail as well as online shopping. Singles’ Day has been consistently growing year on year. In 2014, for example, Alibaba sales on Singles’ Day were $9bn USD, up 63% from 2013. The following year in 2015, sales rose by 60% up to $14bn USD. This growing trend continued in 2016 with sales rising a further 32% to $18bn. Sales then continued to increase year on year, albeit at a slower rate than before, with growth of 39%, 27% and 26% in 2017, 2018 and 2019 respectively.
Therefore, as you can see the scale of Singles’ Day was growing massively at first, with that growth then beginning to slow down over time. This all changed in 2020, however, with a massive 85% growth being recorded when compared to 2019, comprising a huge $75bn in Alibaba sales. This may largely be due to the COVID-19 pandemic – one theory suggests that Chinese consumers saved a lot of money during lockdowns, but were not travelling. Therefore, it is possible that shoppers approached Singles’ Day with a more ‘indulgent’ mindset, choosing to spend their money on more expensive brands than they would usually opt for. Whatever the case, the opportunity is clear: this year’s Singles’ Day has the potential to be even bigger than last year, providing a lucrative chance for online sellers to boost revenue.
With this in mind, is this year’s event likely to continue on the growth trend, or is it possible that consumers will be a bit more reserved? Between lockdowns and the uncertainty brought about by the pandemic, much has changed between 2020 and 2021. In order to ascertain what brands and retailers might expect from consumers on Singles’ Day (and therefore what they should do in terms of preparation), it is important to look at the changes in consumer preferences and behaviour.
The above chart indicates the impact of the Coronavirus pandemic on luxury goods shopping behaviour in China as of January 2021. According to the survey, 65% of respondents from China said that they will be buying higher quality items after COVID-19. In addition, 59% stated that they will be buying more luxury items specifically because they want to treat themselves better. This would suggest that the majority of Chinese consumers intend to buy higher quality and more luxury items in 2021, meaning there is a strong possibility that Singles’ Day this year will be even larger than 2020.
This hypothesis is further strengthened by the fact that only 30% of respondents said they would repair or maintain their luxury items as opposed to buying new ones. Additionally, only 17% have shifted their purchasing habits towards cheaper versions of products during COVID-19, as well as a mere 12% intending to buy more second-hand luxury items after Coronavirus. Finally, it is also important to mention that 55% of the respondents have begun using online channels more often for purchasing luxury items since the beginning of the pandemic, highlighting the opportunity and importance of working with marketplaces to offer your products to Chinese consumers digitally.
All in all, this data paints a clear picture of the consumer behaviour in China following the Coronavirus pandemic, namely how consumer spending habits are likely to change this year. The data from this survey points to a situation in which Chinese consumers will increase their spending – buying both higher quality and more luxury items than they would have previously, and doing so predominantly through online channels as opposed to physical retail stores. Finally, it would appear that the stated reason for this is that Chinese buyers want to treat themselves better, which would support the earlier theory about Chinese consumers adopting a more indulgent mindset following past lockdowns.
With the sheer scale of Singles’ Day outlined and the sizable opportunity made clear, there is no doubt that businesses will want to get involved and try to get a piece of the pie. So, what are some of the key considerations that brands and retailers will need to keep in mind if they want to be successful in the Chinese market?
First and foremost, it is important to understand the Chinese market and develop a targeted strategy for China, as Chinese consumers are unique and therefore your practices should reflect that. For example, one of the largest differences with Chinese commerce is that it leans very heavily towards mobile, with 90% of Singles’ Day sales in 2019 coming from smartphones. Knowing this is the first step of actionable insight that will be helpful when it comes to tailoring your offering to Chinese consumers.
In addition, Chinese shoppers also give a much heavier weight to recommendations through word-of-mouth than in other parts of the world – they typically enjoy sharing what they are buying and their opinions on those products with friends and family. Therefore, you will want to make sure that you have excellent customer engagement and satisfaction, as shoppers will spread the word (and equally you do not want them spreading negative opinions about your brand).
Another key, emerging insight into the Chinese market is the immense popularity of live streaming. According to eMarketer, “live streaming social commerce sales in China will reach $131.52 billion in 2021 and account for 37.4% of total social commerce sales in the country.” To continue, it has also been theorised that live-streaming is one of the factors that has been driving the exponential growth in Singles’ Day over the last few years.
Therefore, it is an important practice to consider if you want to optimise your success during the event. From an investment standpoint, it is also even more effective as you do not need to spend a lot of money in order to run a successful livestreaming campaign. In fact, the main appeal of live-streaming by definition is not production value – rather it is authenticity.
Live Streaming is also said to have reduced return rates as consumers have so much information about the product before buying it and therefore are less likely to be dissatisfied.
Finally, another common pitfall that you do not want to fall into as a retailer, is not accounting for the sheer scale of the event. The volume of sales during Singles’ Day is absolutely massive, so it is important to have your inventory ready, know what your key products are and ensure you have enough stock to meet the explosive demand. You may also want to consider that exclusive product offerings are part of what makes Singles’ Day special, so you will want to market your items as a limited quantity offered for a limited time.
Although Singles’ Day is just around the corner and presents itself as a great opportunity to get involved in the Chinese market, it is still best practice to have a more comprehensive strategy that will drive success year-round. Our research team keeps abreast of the latest trends to ensure we can always deliver excellence to our clients. With the ecommerce industry evolving so rapidly, we are constantly monitoring the space including new trends that arise, in order to ensure that our clients are able to compete on the global marketplace stage.
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