SHANGHAI — China’s Singles’ Day sales are already the largest one-day e-tail event in the world — and this year is expected to be the biggest yet.
Conceived in 2009 by Chinese e-commerce giant Alibaba as an excuse for single people to buy a gift for themselves, Singles’ Day, held every year on Nov. 11 (in Chinese, shuang shi yi, or double eleven), has morphed into an all-encompassing discounting spree.
Last year, Alibaba broke its own one-day sales record by a massive 80 percent on Singles’ Day, processing more than $5.75 billion through its online payments system, while another $1.6 billion was spent on JD.com — all in 24 hours.
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In comparison, comScore said spending on Cyber Monday, the biggest online sales event in the U.S., reached $1.74 billion in 2013, an increase of 18 percent year-on-year.
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This year, analysts are predicting an event bigger result for Alibaba’s Tmall and Taobao, as well as other online retailers, including JD.com, Suning and Yihaodian, which have all jumped aboard the Singles’ Day bandwagon. James Tompkins, founder and chief executive officer of consulting firm Tompkins International, said at a presentation in New York hosted by financial services firm Cohn Reznick, “I am anticipating Alibaba will do $8 billion this year on Singles’ Day.”
Liu Jun, deputy director of China’s State Post Bureau, forecast the number of deliveries over the Singles’ Day sales period will rise 50 percent over last year, with more than 500 million parcels expected to be delivered next week.
“Sales growth nearly doubled between Singles’ Day 2012 and 2013. Competition will be even stiffer this year, as more e-tailers and brands enter the fray,” said Emma Li, researcher at digital business intelligence agency, L2. “While sales figures are impossible to guess, Singles’ Day 2014 sales should surpass last year.”
Xingli Zhang, online retail analyst at iResearch, predicted Alibaba’s gross merchandise volume would top 50 billion yuan, or $8.17 billion at current exchange, while Vanessa Zeng, eBusiness analyst at Forrester Research, believes there will be a 30 to 40 percent overall rise in Singles’ Day sales over last year.
According to Zeng, one of the biggest drivers for this year’s expected growth is the increasing internationalization of the day, with more global brands — including Gap, Mango, Uniqlo and Asos — signing on for the event on Chinese platforms, and major platforms increasingly looking overseas.
“This year, with the two big Chinese e-commerce giants, Alibaba and JD.com, listing on the U.S. stock exchange, they have further turned their attention to the global market,” she said.
Tmall chief executive officer Yulei Wang last month wrote an article on major Web portal Sina.com outlining Alibaba’s global plans for Singles’ Day. These include setting up overseas servers to improve the cross-border shopping experience, as well as operating overseas warehouses and increasing cooperation with international logistics firms and customs authorities.
“This year for Singles’ Day, our core keyword is globalization. Starting from this year, future Singles’ Days will definitely not just be for consumers in a particular region, Singles’ Day will be for the whole world,” Wang wrote.
At a time when major Chinese e-commerce platforms are looking overseas for revenue growth, U.S. e-commerce giant Amazon is taking aim at the Chinese market by offering consumers here the opportunity to shop on international — U.S., German, Italian, Spanish and French — Amazon sites, which will offer direct shipping to China in honor of Singles’ Day. Amazon has arranged partnerships with EMS, UPS, and other global shipping companies that should bring international orders to China faster than ever, in many cases within three days.
Another expected sales driver is the growth of m-commerce in China, opening up the country’s vast rural interior (where most people get online via a smartphone) for business, as well as the use of mobile payments, which may play into the hands of eternal China e-commerce bridesmaid JD.com.
“Last year, mobile payments accounted for one third of total sales on Taobao and Tmall, and will likely achieve 50 percent this year,” Emma Li said. “WeChat [China’s largest messaging service] has teamed up with JD.com, which will be a game changer this year and disrupt the dominance of the Alibaba ecosystem.”
Though analysts all seem to agree this year’s popular categories will remain unchanged — with electronics, home appliances, apparel, shoes, beauty and personal care leading the way — some are detecting a shift in consumers’ appetite for rock-bottom prices over quality products.
“These sales have traditionally amounted to price wars. However, as the market has matured, Chinese consumers are placing a premium on authenticity and superior service, which plays into JD.com’s strengths. Consumers come to our site because there is no point in getting a low price if the product might be fake or may not arrive for weeks,” a JD.com spokesperson said.
The lessening sensitivity over price is unlikely to equal a Singles’ Day bonanza for the luxury market in China just yet, however, with many players wary of diluting their brands with heavy discounting.