I recently got back from Engine’s Asia offices, where everyone was buzzing with excitement about this shopathon concept.
This 24-hour shopping day is the Chinese equivalent of Cyber Monday. It started in 2009 by ecommerce giant Alibaba and has evolved into the biggest online shopping day of the year—raking in $14 billion in 2015 with mobile purchases accounting for 75% of total sales.
In the UK, the start of November means that the retail frenzy of Black Friday and Cyber Monday are fast approaching. But as reports this year suggest that Black Friday is no longer the money pit it used to be, it’s time for UK brands to think globally.
While Black Friday sales are expected to disappoint with just 21% of UK shoppers saying they will be taking advantage of the slashed prices, Singles' Day is set to break records with this year's sales predicted to increase by 50%, with total sales reaching $21 billion. That’s almost $1 billion per hour.
With success on these levels, it’s clear that Singles’ Day presents a huge opportunity for UK retailers. Brands like Topshop are already capitalizing on this phenomenon, reporting a sales surge of over 900% on the day in 2015 compared to 2014.
With over 600 million internet users and 1.3 billion mobile phones nationwide—China’s 468 million digital shoppers equate to 40% of the total global e-commerce spend and a report by OC&C Strategy Consultants shows that in China, over 70% of people are more willing to spend on clothing than before—with a lot of this expected to come through e-commerce.
Having skipped the PC era, Chinese consumers are savvier, more switched on and demand digital innovations at a level unprecedented in other markets.
Different apps, such as WeChat, mean that platforms Western marketers might be used to, such as Twitter and Facebook, no longer apply.
What does this mean for brands looking to tap into the lucrative Chinese market? Investing in ecommerce localization is key. Adapting and tailoring your digital assets is a base requirement for those looking to appeal to a foreign audience.
Brands seeking to enter the Chinese market will have to replicate the success of Singles’ Day retailers by understanding and responding to China’s changing demographics namely, its increasing disposable income, emerging middle class and increasingly affluent young population.
For the event, Alibaba has sponsored a nationally televised gala, which leads to a midnight kick-off. By identifying the right celebrities (David Beckham headlined this year) and a format that fits with Chinese shopping mentality, Alibaba has successfully transformed the shopping event into a media spectacle with an expected viewership of around 200 million (doubling last years’ viewer figures), 10 million of whom will be from outside mainland China.
This shift underlines a trend identified in a recent report from Cassandra, Engine’s leading provider of youth insights and emerging trends, which illustrates the changing shopping habits of millennials. They increasingly see it as more of an event and communal experience than previous generations ever did.
This concept from the innovation hothouse of Asia will make brands and retailers eyes water. Agile players will surely be lining up to test and learn from Singles’ Day because discounting during the peak buying season, counter-intuitive though it may seem, is here to stay.
—Debbie Klein is the chief executive officer of Engine, Europe and Asia Pacific.
Picture license: Creative Commons