Understanding Singles Day Sales – The Chinese Cyber Monday
While Cyber Monday continues to be the biggest online shopping day in the United States, a new online shopping day has emerged in China that has captured the eye of the eCommerce industry around the world. Dubbed “Singles Day” and acting as China’s anti-Valentine’s Day, November 11th is now the biggest online shopping day on the planet. Here are some things to know about Singles Day…
What exactly is Singles Day?
Singles Day was traditionally a one day holiday in China where consumers celebrated being single – a day especially attractive to young males due to the growing gender disparity in China (over 20 million more males than females in China by 2020). It was initially a holiday with no major historic or religious significance, but merely a day created in the early 1990’s by some students who were frustrated by the cultural pressure in China to find a long-term relationship. Once a more formal holiday for single people to gather, Singles Day has evolved into a reason for Chinese consumers (single or not) to purchase items online for themselves and occasional gifts for others. The online aspect of Singles Day was started by the Chinese site Tmall (owned by major Chinese web retailer Alibaba) in 2008.
How has Singles Day grown?
The growth of Singles Day has been nothing short of astounding. Back in 2009, Singles Day was merely a traditional day in the online shopping industry and paled in comparison to the sales of Cyber Monday in North America. Only five years later, Singles Day has easily surpassed the sales of Cyber Monday, with over $5.75 billion in Singles Day sales in 2013. Almost $2 billion of Singles Day sales came from Tmall alone – nearly the entire total spent in the USA across all eCommerce sites on Cyber Monday ($2.29 billion). Alibaba reported that throughout all of its sites it had 402 million unique visitors on Singles Day – more than a third of the adult population in China – and prepared 152 million parcels for shipping.
How does Singles Day work?
Singles Day has become a day eagerly awaited by many Chinese consumers that falls directly between two Chinese holidays (National Day on October 1st and the Chinese New Year in February) in what was once a slow time of the year for the retail industry. With many eCommerce sites offering 50% or greater discounts site-wide on Singles Day it becomes easy to “window shop” online knowing products will be discounted in the coming days. Many consumers will even go as far as to add items to their cart only to abandon it until Singles Day, likely due to the “bargain hunter” mentality of many Chinese consumers. The strategy is to wait until after midnight (when Singles Day starts) to complete the transaction. In 2013 this was especially the case, when $164 million in online sales happened in the first six minutes of Singles Day on Tmall alone.
What are some of the challenges of Singles Day?
With so many orders placed in one day, Singles Day also comes with its fair share of problems. Many eCommerce sites in China faced issues with their payment processing and order management systems, often returning error pages to consumers looking to make purchases, especially at the very beginning of Singles Day (right after midnight). The mad rush for orders also creates inventory issues – some orders may not be placed or will be rejected because items are no longer available, forcing consumers to quickly choose another option (i.e. different color) or product. Some sites, such as DangDang, attempted to get a head start on Singles Day by starting promotions three days earlier than November 11th to hopefully boost and spread out sales across multiple days.
How Does Singles Day Affect North American and European Online Retailers?
The explosive growth of Singles Day from 2011 ($800 million) to 2012 ($3.1 billion) put the Chinese holiday on the radar of some of the larger online retailers for 2013 with many global retailers participating in Singles Day for the first time. With Singles Day online sales surpassing $5.75 billion in 2013, it’s likely the number of online retailers who will participate in Singles Day will increase in 2014. It remains to be seen how this new online holiday will catch on in North America and Europe, but given the continued globalization of technology it’s certainly possible Singles Day is not far away from becoming a global shopping phenomenon in the coming years.
In conclusion, the exponential growth of Singles Day in the online retail industry continues to be a surprise and the holiday doesn’t appear to be slowing down any time soon. While all of the online orders can cause some issues, the strong growth cannot be ignored and November 11th is a date all online retailers should know – just in case expansion of the online holiday outside of China happens sooner rather than later!