American brands wanting to target Chinese customers should focus on Black Friday, not Singles’ Day.
So said Lila Snyder, president of global e-commerce at Borderfree, a platform that enables cross-border commerce and which works with about 200 U.S. and U.K.-based brands on making their labels shoppable in China.
Just as Singles’ Day was winding down in China, Snyder told WWD that the most significant learning experience for U.S. brands since participating in the e-commerce holiday for the first time last year is looking at the depth of promotion and making sure they understand how to break through the clutter.
Despite Alibaba’s Singles’ Day sales alone hitting $14.3 billion for the day on Wednesday, Snyder suggested American brands should focus more on generating Black Friday sales in China.
“When you look at Chinese retailers and what consumers are used to in terms of a Singles’ Day promotion, they start at 45 to 50 percent discount and get larger from there,” she explained. “It’s a very different mind-set from what brands and retailers typically would do in terms of the depth of discounts they offer [in the U.S.].”
Borderfree partnered with Alipay’s ePass in November 2014. The pilot program gave Bloomingdale’s, Macy’s, Ann Inc., Saks Fifth Avenue and Aéropostale Inc. access to a suite of products that made their stores and brands shoppable in China, including ePass payments and logistics service and marketing through Borderfree’s global e-commerce platform.
Demand for American brands in China is already there. Data from a recent study conducted by Borderfree showed that U.S. retailers are the number-one destination for Chinese consumers who are looking to shop cross-border, followed by Japan and Germany. This suggests that Singles’ Day is now a global holiday and is no longer limited to the Chinese market.
Snyder said the retailers Borderfree works with that are having success in China (she cited the pilot group as an example) are placing a greater emphasis on drumming up Black Friday sales because Singles’ Day is just too cluttered. Data from last year showed that Black Friday was a bigger day for U.S. retailers in China than Singles’ Day.
In addition to the group of Borderfree retailers that participated last year, Gilt, Nordstrom, Macy’s and Neiman Marcus were among the merchants that partook in the occasion, in varying capacities. In August, Macy’s said it had entered a joint partnership with Fung Retailing Limited to start selling on Alibaba Group’s Tmall.com. “We are just beginning to test and learn, which is the purpose of this initial pilot,” is all a Macy’s spokeswoman would say about the retailer’s e-commerce efforts in China.
“It’s an amazing time to build your brand, but not necessarily to build your business,” said Brian Buchwald, chief executive officer of consumer intelligence agency Bomoda, who agreed with Snyder. A retailer might get more eyeballs, but sales generated will be at a very low margin.
Despite this, Singles’ Day is still an invaluable marketing opportunity, especially for American brands. Buchwald contended that brands can’t afford to miss out taking part in the blockbuster day, as it’s now become an “international holiday.” If any brand wants the Chinese to take notice of their brand, exposure on Nov. 11 is a must, especially with the addition of corresponding omnichannel, in-store initiatives.
“It’s a great promotional opportunity [Nov. 11], but it’s not good enough to just participate. You have to think about your marketing and leveraging Chinese social media and search,” he continued. “You can get lots of consumers to check you out if you do a good job marketing. You should be looking at the other 364 days of the year as sales opportunities.”
Sucharita Mulpuru, vice president and principal analyst at Forrester Research, disagreed. To her, the day is far from saturated or cluttered with deals.
“When sales grow nearly 50 percent year-over-year, which is what they seemingly have, it’s definitely not yet saturated,” she said, adding that most luxury brands probably still don’t wish to participate in Singles’ Day when it comes to apparel.
Prestige beauty is a different story, and the category appears to be the entry point for major U.S. retailers that want to sell online to China.
“We hope to enable ways for customers to shop on their terms and affiliate programs help us reach customers,” said a spokesman for Nordstrom early Wednesday. Although the retailer took part in Singles’ Day with its “favorite” beauty brands, it does not directly ship to China.
Similarly, Neiman’s confirmed that it partnered with Dealmoon on an exclusive beauty offer. It’s a step in the right direction, but neither retailer has yet to offer a sizable product offering online during Singles’ Day, the way Gilt has, for instance.
Gilt had 60 to 70 sales during Singles’ Day, with 26 of those curated expressly for the holiday. That meant an additional 5,000 products were available for Chinese consumers to purchase during Nov. 11, said Oksana Voronenko, senior director of international strategy and operations at Gilt.
It’s the third time Gilt has taken part in Singles’ Day, and while still tallying up sales, Voronenko said the company saw “very good performance.” Of the lineup, which featured brands like Dolce & Gabbana, See by Chloé, Swarovski and Marc by Marc Jacobs, many items sold out in the first few hours. For just the Nov. 10 calendar day in the U.S., which captures half of Singles’ Day in China, the revenue was double what the site typically sees from international sales on any given day.
“We continue to see Singles’ Day influence outside of China, and this year we saw a spike in traffic and conversion for our Korean, Hong Kong and Taiwan markets. A lot was driven by affiliate activity,” Voronenko said.