SHANGHAI — It’s already by far the biggest shopping day in the world’s largest e-commerce market, but experts predicts this year’s Singles’ Day will be the biggest ever.
The shopping bonanza has been held every year on November 11 since 2009, when China’s e-commerce giant Alibaba decided to encourage single people to buy a little something special for themselves on the one day of the year that celebrates them. The 11/11 date actually had been co-opted in China as a festival for single people in 1993.
Over the past six years, Singles Day has become a massive event, with every online retailer in the country and, more recently, brands from around the world jumping aboard the bandwagon by offering deep discounts (of at least 50 percent, but sometimes up to 90 percent) and an ever-widening array of products.
In 2014, Alibaba alone sold $9.3 billion of merchandise within the 24-hour period, but many believe that record is set to tumble on Wednesday.
“It will be bigger than previous years. They have broken the record every year and I don’t know when it will stop. I am pretty confident there will be a new record. There is still room for growth,” said Patrice Nordey, chief executive officer of Shanghai-based digital inception agency Velvet.
“I expect this Singles’ [Day] to smash all previous records with anywhere from $11 billion to $13 billion in sales,” said Michael Zakkour, vice president at Tompkins International and an expert on Chinese e-commerce and Alibaba. “There are more merchants on Tmall than last year, more promotions, more hype and more special events. Based on Alibaba’s year-on-year quarterly growth of 30 percent, Chinese consumers are not spending less, they are shifting spending online and to mobile.”
Mobile was also underlined by Nordey as a sector to watch, with m-commerce accounting for 42.6 percent of gross merchandise value sold via Alibaba’s platforms on Singles’ Day 2014.
“Overall the m-commerce market makes up 30 percent of e-commerce in China and I know from some Tmall executives, they are looking at achieving more than 50 percent of sales using mobile, which would be incredible,” he said.
Similarly, JD.com reported that more than 40 percent of its Singles’ Day transactions last year were made using a mobile phone, a figure the company expects to grow this year.
“Mobile will play a very big role, particularly because of our tie-up with Tencent – their WeChat and QQ platforms have 500 and 800 million users respectively,” a JD.com spokesperson said.
Alibaba declined to make any predictions about sales, but said its Singles’ Day event would feature more than six million products from more than 40,000 merchants and more than 30,000 brands from 25 countries. Participating international brands include Proctor & Gamble Co., Unilever, Burberry, Estée Lauder, Zara, Huggies, Macy’s, Costco, Apple, Nike, Topshop and Uniqlo.
China’s biggest e-commerce player predicted baby and maternity, fashion and apparel, cosmetics, electronics and home appliances, health and nutrition, grocery, and fresh foods would all be key product categories.
For JD.com, Singles’ Day is as much about signing up people who can turn into long-term customers as it is about sales on a particular day.
“If you track our consumers over time, it’s pretty consistent that they spend more in year two, compared to year one, and then increasingly more in years three, four and five,” the spokesperson said.
China Post, the country’s national postal service, estimates 760 million packages will be generated by Singles’ Day sales held by all Chinese online-shopping Web sites on Nov. 11. This would mark a significant rise from the 540 million packages produced last year for the same event.
If there was any doubt about the ferocity of competition between China’s major e-commerce players, it was dispelled earlier this week when the market’s second largest B2C player, JD.com, filed an official complaint against market leader Alibaba with China’s State Administration for Industry & Commerce. JD.com charged Alibaba with illegally strong-arming merchants into agreeing to exclusivity arrangements with Alibaba’s platforms for Singles’ Day promotional activities.
“It’s a part of the war,” Nordey said. “Alibaba are also well known in the Chinese market for pressuring their vendors to place fake orders. I have a lot of customers here that work with Tmall and do the 11/11 promotion who receive calls from the Tmall sales guys telling them to buy their own products, to ensure the sales records are broken each year. The sales numbers are still incredible, but they are certainly overestimated. I don’t know whether it’s by 10 percent or 15 percent, but for sure they aren’t as large as published.”
For their part, an Alibaba spokesperson described the accusations about pressuring sellers to inflate their numbers, or exclusively work with Alibaba platforms for promotional activities, “baseless.”
“JD is panicking because they’re losing,” the spokesperson said. “They simply can’t match our customer and merchant experience and logistical scale because Alibaba wins with customers and merchants as we provide a superior experience for users on our platforms.”