Getting Ready for Singles’ Day 2015: Learnings from Singles’ Day 2014

04 November 2015


 

As online shoppers get ready for another Singles’ Day sale, eCommerce retailers should be taking cues from last year’s successes in order to maximize sales during Singles’ Day 2015.

Singles’ Day made history in 2014 by becoming the largest eCommerce retail event in the world, with record breaking sales of $9.3 billion USD[1]. The China-born online retail event dwarfed other popular shopping holidays such as Black Friday and Cyber Monday which both brought in a total of $2.4 billion USD[2].

Singles’ Day is still far from eclipsing its western counterparts when accounting for physical retail numbers. But the success of Singles’ Day has only solidified China’s position as a global eCommerce powerhouse. The Chinese market earned $458 billion USD in online sales during 2014[3]. For eCommerce retailers looking to expand their horizons in Asia Pacific, Singles’ Day is a valuable calendar event. But before brands dive in head-first into Singles’ Day 2015, there is a lot to learn from the successes of last year’s event to help maximize impact and revenue.

Focus on Mobile and Omnichannel

Mobile has become a key battleground in the Asia Pacific eCommerce market. During Singles’ Day 2014, China’s biggest eCommerce company, Alibaba Group, reported that sales from mobile accounted for 42.6% of its gross merchandise volume (GMV)[4] sales. This is a drastic shift from 2013 when Alibaba’s biggest online marketplaces reported 90% of its transactions were made via traditional desktop PCs[5].

This should prompt brands to not only focus on providing an engaging mobile experience, but adopt an omnichannel approach towards their Singles’ Day initiatives. Brick-and-mortar brands as well as purely digital webstores can use this growing shift towards mobile to expand their digital presence by offering additional touch points for consumers. But the real challenge is in providing a cohesive and consistent consumer experience across all those touch points, be it mobile, desktop or physical retail.

Set Your Sights Beyond Borders

Although the origins of Singles’ Day can be traced back to China, its success has opened it up to brands and retailers that have grown well beyond Chinese borders. China may be the prime stomping ground for Singles’ Day buyers, but word is spreading among consumers that deals can be enjoyed outside of traditional China-based marketplaces.

In fact, despite the growing popularity of domestic Chinese brands among local consumers, foreign brands still have an edge in a substantial number of cases. For instance, through a partnership with TradeGlobal, a SingPost eCommerce company, Hugo Boss has enjoyed a successful launch in China via complementary channels by selling on both its own localized storefront and on local marketplaces such as Tmall.

In 2014, as many as 46% of surveyed Chinese shoppers preferred foreign brands for their grocery purchases due to the deteriorating reputation of Chinese household goods[6]. For more premium items, China was discovered to be the fifth largest consumer of the luxury brand market. But when accounting for consumers who make their purchases abroad, the sales figures puts China right at the top[7]. This high demand for foreign brands reveals a growing Chinese market that is hungry for cross-border products.

In short, brands looking to compete alongside the region’s major competitors have a unique opportunity to make an impression on Singles’ Day shoppers by targeting consumers who are looking for the best deals for trusted foreign brands.

Make Noise Through Marketing Not Just Discounts

The main draw of Singles’ Day is its bargain bin prices, but as the event’s popularity continues to grow, so will the amount of competition. An estimated 27,000 merchants and 42,000 brands participated in Singles’ Day 2014 alone[8]. In order to stand out from the crowd, brands should not rely on slashed prices to gain traction among consumers. Instead, businesses should work on implementing Singles’ Day-centric initiatives to create awareness for their brand’s most popular, highest-demand items. These initiatives should be backed by analytics and constant optimization of ads and offers, in order to better target relevant consumers, drive traffic, and point potential customers in the right direction.

While the price war is an important aspect of any shopping holiday, other possible touchstones include fast and efficient delivery and returns policies, free shipping, and localized 24/7 customer service. Brands shouldn’t limit themselves to advertising low prices, when market presence and consumer mindshare can be gained through providing additional value outside of simple price drops.

Tighten Your Supply Chain to Quickly Scale on Demand

The surge of sales from last year’s Singles’ Day was a boon for eCommerce merchants who were fortunate enough to get in on the action. But it has also spawned a number of key challenges in inventory and delivery fulfillment.

Events such as Singles’ Day demand that merchants and retailers tighten their supply chains in order to quickly scale during seasons of high demand. A tighter supply chain that utilizes automated and managed processes can help alleviate the burden of needing to micromanage logistics. And by pre-planning and strategizing around key calendar events like Singles’ Day, processes can be implemented to smooth out systems such as payment, deliveries and returns, and after-sales customer care.

Provide eCommerce Offerings for Everyone

While a large part of China’s ecommerce market appears to be largely interested in fashion and accessory purchases (40%), the remaining 60% isn’t as well-defined[9]. Premium items such as technology and appliances are popular purchases for Chinese consumers during Single’s Day, but there is a significant margin of consumers who are using the event to save on everyday groceries and consumable household items.[10]

Alibaba founder Jack Ma had once described eCommerce as nothing less than a lifestyle in China[11], with consumers becoming increasingly open to purchase anything online, from expensive luxury goods to everyday grocery items.

As online retailers begin to prepare for the coming Singles’ Day, it is still important to bear in mind the learnings from last year’s sales events. While it is far too early to predict whether 2015’s sales will match the record breaking figures from 2014, retailers and merchants can look forward to a potentially lucrative and busy November.

About the Author

Marcelo Wesseler, CEO of SingPost eCommerce

Marcelo leads the eCommerce business unit for SingPost. He has more than 15 years of international experience in global eCommerce businesses and held senior management positions at KPMG Consulting, Hewlett Packard in the US, and RS Components. Prior to joining SingPost in 2012, Marcelo implemented businesses like hpshopping.com, sonystyle.com, mini.com, china.rs-online.com to name a few. Follow Marcelo on Linked

 


SOURCES

[1] The Guardian - http://www.theguardian.com/media-network/2014/nov/18/alibaba-singles-day-retail-marketing

[2] Marketing Land - http://marketingland.com/black-cyber-weekend-boom-much-109474

[3] China Internet Watch - http://www.chinainternetwatch.com/14344/china-largest-e-commerce-market-the-world-2014/

[4] Tech Crunch - http://techcrunch.com/2014/11/11/singles-day-underscores-the-importance-of-mobile-and-lower-tier-cities-for-chinas-e-commerce-companies/

[5] Tech Crunch - http://techcrunch.com/2014/11/11/singles-day-underscores-the-importance-of-mobile-and-lower-tier-cities-for-chinas-e-commerce-companies/

[6] The China Perspective - http://www.thechinaperspective.com/articles/china-consumer-retail-weekly-chinese-prefer-foreign-brands-for-grocery-10702/

[7] Quartz - http://qz.com/477036/when-chinas-yuan-falls-so-do-the-fortunes-of-luxury-fashion-brands/

[8] Tech Crunch - http://techcrunch.com/2014/11/10/alibaba-makes-strong-start-to-singles-day-shopping-bonanza-with-2b-of-goods-sold-in-first-hour/

[9] KPMG - http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Newsletters/China-360/Documents/China-360-Issue15-201401-E-commerce-in-China.pdf

[10] MGD Advertising - http://www.mdgadvertising.com/blog/3-e-commerce-marketing-lessons-we-can-learn-from-china/

[11] Prospress - http://prospress.com/chinas-ecommerce-lifestyle/