SHANGHAI — Ahead of China’s largest annual consumer event, high-end brands have started jumping on the Singles’ Day bandwagon.
Other trends emerging ahead of this year’s event are the introduction of virtual reality shopping experiences and the emergence of a consumer-to-business strategy in which customization will be used to attract consumers in what has become an exceptionally crowded marketplace.
According to Singles’ Day folklore, the shopping festival more commonly known in China as “shuang shi yi” or “double 11” — a term the e-commerce giant Alibaba trademarked back in 2012 — started its life as a sales promotion on Alibaba’s Tmall platform in 2009 with just 27 brands taking part.
Last year, consumers spent $14.3 billion on Alibaba’s shopping platforms over the 24-hour period, beating both analysts’ expectations and the web giant’s previous 2014 Singles’ Day record of $9.3 billion worth of merchandise sold.
By even further diversifying its offering and brand partners participating in the festival, as well as extending the period for pre-orders of discounted product to several weeks before Nov. 11, Alibaba is likely to break this sales record again this year.
According to Tompkins International Consulting principal Michael Zakkour, there should be “massive growth” in Singles’ Day results for the next ten years as China’s online shopping population grows from its current level of 500 million up to as many as 800 million shoppers, and the country’s middle class expands by hundreds of millions of people over the same period.
“It is reasonable to assume 15 to 20 percent year-on-year growth for the next decade,” Zakkour said, though he pointed out that he expected Alibaba to hit $11 billion to $12 billion in sales for Singles’ Day last year and was found to be too conservative in his predictions.
“Risking being wrong again this year, I am estimating total sales from Alibaba to be between $15 and $18 billion, and total [Singles’ Day] sales across channels and platforms both online and offline for all of China to surpass $25 billion.”
Since Singles’ Day began, other major e-commerce platforms have embraced the shopping festival. JD.com, China’s second-largest business-to-consumer e-commerce player, saw its gross merchandising volume rise by 140 percent on the year for Singles’ Day in 2015.
Other players with Singles’ Day activities planned this year include Amazon, Wal-Mart’s Yihaodian (which is now operated by JD.com), Farfetch and electronics retailer Suning.
Chinese luxury flash sales e-commerce platform Mei.com, which last year accepted strategic investment from Alibaba and, as a result, now has a permanent channel on the Tmall marketplace, is participating in Singles’ Day promotions for the first time this year.
“My personal belief is that 11/11 is not only a commercial shopping festival based on discount but that it is slowly evolving to a shopping festival where customers search for relevant and unique products, following the rising income of Chinese middle classes,” Mei.com founder and chief executive officer Thibault Villet said.
“Those customers are less discount-sensitive but care about relevancy of products, styles and brands. To win in China online, international brands will have to adapt their products to local tastes and leverage local marketing tools such as [Singles’ Day] to reach deeper audiences,” he added.
According to Villet, many of Mei.com’s luxury brand partners — including Rebecca Minkoff, Opening Ceremony, Paul Smith, Sonia Rykiel and Ports 1961 — were keen to be involved in Singles’ Day promotions, in spite of the deep discounting that is inherently part of the festival.
“They are aware that customers are expecting to get discounted products or special offers so they support it. It is like a seasonal sales promotion and they have prepared inventories accordingly,” he said, adding that Mei.com will also release a full-price capsule collection from Trussardi to coincide with Singles’ Day. It has already started discussions with “five to ten” brands interested in collaborating next year by releasing specific capsule collections for Singles’ Day 2017.
It seems a number of high-end brands have chosen 2016 as the right time to make their Singles’ Day debut. At Tmall Collection, an eight-hour, see-now-buy-now fashion show recently held in Shanghai and billed as the official launch for Singles’ Day activities, there was a noticeably higher-end feel to the brands participating, which included Ted Baker, La Perla and Daniel Wellington.
Also participating in both the launch event and Singles’ Day promotions are brands such as Burberry (which has had a Tmall store since 2014 but has declined to offer promotions as part of Singles’ Day until this year); Guerlain (which is one of the few LVMH Moët Hennessy Louis Vuitton brands to officially partner with Tmall), and Maserati, which will be offering 20 Quattroporte GranLusso cars, retailing for 1.54 million yuan, or $226,705, each exclusively on Tmall for Singles’ Day.
“I believe we will have a brilliant Double 11. Even though we have a history of more than 100 years, we embrace change, our co-operation with e-commerce shows our openness to change,” said Pan Weili, senior marketing manager at Maserati China.
The luxury carmaker has already had success partnering with Tmall for special sales events. Back in March, Maserati’s first SUV, the Levante 350 hp, was sold exclusively on Tmall for 999,800 yuan ($153,500). The first 100, worth almost 100 million yuan in total, sold out in 18 seconds.
Over at JD.com, there is an increased focus on promoting independent local brands — more broadly and as part of Singles’ Day. Chi Zhang, a designer known for sexy, skin-baring looks with a sporty influence, will stage a runway show of his spring-summer 2017 collection at JD’s Beijing headquarters on Nov. 11. The show, which will be live-streamed on JD.com, will coincide with the commercial launch of Zhang’s fall collection on the company’s e-commerce platform.
“Every brand and retailer has to have a custom approach [and] to balance the value of discounting and promotions to drive sales volume with the opportunity to introduce or bolster the brand awareness among 600 million shoppers,” Zakkour said.
“It really depends on what goals and KPIs a brand sets for itself. That said there is no doubt that brands can create awareness pre-, during- and post-Singles’ Day to realize long-term upsides with Chinese consumers,” he added.
According to Teresa Lam, vice president of the Fung Business Intelligence Centre in Hong Kong, the evolving trend of C2B and mass customization creates a win-win for retailers and consumers.
“This year’s Singles’ Day will see a lot more pre-sale activities that leverage the C2B business model. Mass customization will also be more common and allow businesses to create more unique online shopping experiences for customers,” Lam said, adding that Alibaba’s record-breaking 2015 transactions were largely attributable to pre-sale activities.
Another new addition to Singles’ Day is virtual reality technology, with Alibaba touting its end-to-end VR shopping experience, available from Tuesday to 11, whereby shoppers can browse, order and pay using VR headsets at home and on the Taobao app.
As it did last year, Alibaba will host a countdown gala ahead of the 24-hour sales period, this time to be held in the southern Chinese technology and innovation capital of Shenzhen and headlined by pop star Katy Perry — who is commonly known in China as “fruit sister” because of her colorful costumes and sweet persona.