By Frank Lavin via Forbes:
I am running up to Shenzhen this week to help out with Singles’ Day, which has become not just the largest e-commerce shopping day in China but the largest in the world. Alibaba launched this annual November 11 online sale in 2009 with just 27 participating merchants. Since then, they’ve turned it into a series of activities that captures the national conversation in China, sets the pace for marketing and advertising, dominates the entire logistics chain, and turns China’s retail ecosystem upside down.
When Western merchants think of online mega-sales, they might think of Black Friday or Cyber Monday. But retailers also ought to be watching 11.11 closely, not only because of China’s growing importance as a consumer market, but also because of the retailing innovations in O2O, cross-border e-commerce, digital marketing and other areas that are part of the 11.11 sale. Here’s what you need to know:
Not just large, the largest. In 2016, Alibaba passed $14 billion in revenue on Singles’ Day, more than double the $5.8 billion in sales of the combined U.S. e-commerce holidays of Black Friday and Cyber Monday. How is this possible? Alibaba’s China retail marketplaces boast some 440 million active users shopping the virtual stores of millions of businesses. No other platform comes close in terms of scale. My prediction: Singles’ Day 2016 will see an increase of 50%, taking total sales above $21 billion. Alibaba founder Jack Ma has built a machine that will hum along at almost $1 billion an hour.
Shopping is not just a transaction in China, it is an event. Even a way of life. Singles’ Day is such a spectacle that it is a destination in its own right. Alibaba has hired Hollywood producer David Hill, best known for producing the Oscars and the Super Bowl, to produce a four-hour nationally televised gala for the evening of November 10 leading to a midnight kick-off (yes, I will be there). Headlining the gala is Katy Perry, and there will also be bands from Korea and Taiwan, German soccer star Thomas Muller (Bayern Munich) and other celebrities from around the world. The audience in China last year when Daniel Craig headlined was over 100 million. My prediction: Gala viewership this year crowds 200 million, at least 10 million of whom will be from outside of mainland China.
The best tool for accessing the China market. Don’t lose sight of the original goal for Singles’ Day. China is the fastest-growing consumer market in the world and e-commerce is the fastest-growing channel in that market. So 11.11 is a chance to speak to these China consumers , whether you are introducing a new product or refreshing your brand. There are plenty of sales and bargains, but the day is much more than a celebration of mark-downs. You are joining the national conversation. You need to have something to say. Some brands will launch products specifically for Singles’ Day. Others will offer live-streamed contests and reality TV shows.
It is an emerging channel for global interaction. The Singles’ Day sale is not just a way to connect consumers and brands, it is a way to connect China and the world. Alibaba’s Tmall B2C marketplace has been building connectivity in Hong Kong and Taiwan for several years. (Note the Singles’ Day ads on the Hong Kong subway system.) Already, some 10% of the purchases on Singles’ Day are from overseas brands.
It is not a day, it is a month. Sure, 11.11 is the day for the sale, but promotional activity starts 30 days out with a major October series of announcements and promotional activities, much like Christmas shopping starts the day after Thanksgiving in the U.S. Brands need a bit of runway for messaging, to develop word-of-mouth, and to gauge the market. Singles’ Day is designed to help the merchants as much as the consumer and a 30-day event allows everyone to get the most out of it.
It is the future of digital innovation: Alibaba is featuring an augmented reality game to allow people to chase black cats (the Tmall mascot) like Pokémon GO. The company has also unveiled for the sale a virtual reality shopping experience that allows consumers to connect their smartphones with a VR headset and make purchases as if they were in a physical store in New York City. And there are mobile apps that enable shoppers to digitally see how they look in clothes and cosmetics. My prediction: Bad news for laptops. Some 60-70% or sales will come from mobile. So fingers crossed for Singles’ Day. Good luck to all consumers and merchants. And if you are watching Katy Perry at the Gala Nov 10 and you see another Left Shark stumbling a bit on stage — that just might be me.