“Shopping has become entertainment,” Alibaba Chief Executive officer said during the star-studded gala leading up to this year’s biggest retail event, Single’s Day. The ever-growing Chinese shopping festival, also known as 11/11, shattered records again this year, coming in at a total GMV tally of $17.8 billion (RMD 120.7 billion).
What began as a counter-culture movement by university students in the 1990’s has morphed into something quite different today – a cultural consumption festival that now dwarfs both its U.S. rivals of Black Friday and Cyber Monday combined.
Originally started in Nanjing University in 1993, Single’s Day (or 光棍节 “bare sticks holiday” or 双十一 “double 11′) began for and by the uncoupled to celebrate their singledom. The date was appropriately chosen since the day consisted on four “one’s.” In a culture where self-deprecation is the norm for university students who still have not found a mate, the burgeoning unofficial Chinese holiday served to curb that negativity and shed some levity and light on their plight.
In 2009, Alibaba founder and general Internet visionary Jack Ma reinvented the holiday as the ultimate time to shop online – that is, what better way to assuage the woes of singledom than by indulging in some healthily discounted online shopping? The scope of the holiday and the buzz surrounding the festival have steadily grown over the past seven years, as well as the fact that many competitors and even Western retailers have begun to participate in 11/11-related activities, such as JD Worldwide, Farfetch and Opening Ceremony.
This past 11/11, even though the numbers broke all records in terms of the sheer volume and value of merchandise sold in a 24 hour period, growth actually slowed down year over year. In the 2014 to 2015 period, Alibaba’s 11/11 revenue clocked in at an impressive 60% YoY. However, this past year in relation to last, growth halted a bit, coming in at approximately 24% YoY. The core question is: Can Alibaba keep up the momentum in the years to come, especially as the overall growth of the Chinese economy continues to slow?
Let’s briefly examine what worked and what didn’t for Alibaba this year.
- Alibaba commenced the start of Single’s Day with a splashy show, akin to the Lunar New Year countdown, broadcasted from the company’s headquarters in Shenzhen. The spectacle was brimming with international celebrities, such as Victoria and David Beckham, Kobe Bryant and OneRepublic. Jack Ma, Alibaba founder, even performed a magic trick on stage.
- Sales and deals began earlier and earlier this year. Alibaba began promoting Single’s Day as early as the Mercedes-Benz sponsored Shanghai Fashion Week (October 25 – November 2nd), where its B2B platform Tmall offered live streaming from its 8-hour fashion show, replete with the au courant “See Now, Buy Now” business model.
- 2016 marked the first year that shoppers in Hong Kong and Taiwan could buy directly from global brands on Tmall. Alibaba has reported that it would continue to expand the areas where 11/11 deals and promotions are accessible on a yearly basis.
- In a country where mobile is king, Alibaba has continually optimized its e-commerce experiences for Tmall and Taobao on mobile devices. As of 1pm China time on 11/11, mobile accounted for approximately 84% of total sales.
What Didn’t Work:
- Katy Perry, widely celebrated in China as 水果妹 (Fruit Sister) had to cancel her massively anticipated concert during the lead up to 11/11 due to unidentified “family reasons.”
- Reportedly, Alibaba has come under increasingly pressure from the SEC (Securities and Exchange Commission) on how it actually reports revenue – since Alibaba doesn’t take a cut of sales from its merchants, instead charging for advertising, the actual amount of unaudited revenue coming in is a bit murky, to say the least.
- Many Western retailers are still reluctant to offer their goods on Tmall – citing either security issues, a desire to maintain access exclusivity, or the high fees that must be paid to Alibaba in order to join the platform. Earlier this year, Coach, for instance, shuttered its Tmall store in favor of providing sales to the Mainland market via its official WeChat account and website.
- Given the frenzy around Single’s Day, many shoppers have expressed frustration in the disruption of their normal online shopping activities. On the topic, 28-year-old lawyer from Beijing Yang Qian said “I don’t like Single’s Day because I’m not able to buy the things I want. I put a shampoo in the shopping cart a few days ago, but when I went to pay for it at midnight, it was already sold out.”
Alibaba also rolled out support for VR, allowing users to virtually shop from U.S. department stores like Macy’s from the comfort of their own homes. Though rather preliminary for 2016, the use of VR in shopping is expected to ramp in the coming years for Single’s Day-centered activities by Alibaba.
What were your thoughts on Single’s Day? Feel free to comment below and continue the discussion.
That’s all for now.