$2 billion sales in 17 minutes – Why Singles Day must be on your Radar
Despite being the world’s largest online shopping day, China’s Singles Day almost sneaks under the radar in the West.
Created in 2009 by Alibaba, it has been enormously effective in targeting younger consumers, who are increasingly reliant on the Internet for purchasing everything from toiletries through to luxury items.
With $2 billion in sales in the first 17 minutes of this year’s event, and over 27 million purchases via mobile devices in the first hour alone.
With an overall online projected market size of over $1 trillion by 2019, it is clear that it’s a rapidly developing opportunity, and despite competition from domestic retailers, there’s certainly enough demand to go round.
With such incomprehensible numbers, it’s baffling we don’t speak about it more.
Largely drowned out by the media frenzy caused by Black Friday and Cyber Monday, it’s only very recently that some sleeping western giants are beginning to wake up to eastern opportunities.
Alibaba owned Tmall is a platform offering a fantastic way to launch in the Chinese market – offering a huge ready-made audience, but without the risk of bricks-and-mortar retail.
Macy’s for one has tapped into this potential, launching earlier this year and already targeting sales of $50 million for the next 12 months.
So how can other Western retailers follow the pioneers’ example?
Embrace local culture
Retailers have to accept and understand cultural differences.
Trust, is still central to doing business in China; whether the relationship between retailer and customer, or between a retailer and local suppliers.
Chinese retail is still in its infancy, and as a result shoppers seek out consumer reviews and reassurance via a retailers customer service teams (often via live-chat).
Tmall and other Chinese marketplace platforms are a great low effort entry into the market, and an essential channel with almost an 80% market spend share.
However, own-brand websites are growing in popularity for brands to convey their brand image and personality directly to consumers.
However, Chinese websites are vastly differently to Western counterparts, so firms must think beyond simply translating their existing website.
To say Chinese consumers are fans of mobile shipping is somewhat of an understatement.
Chinese customers are three times as likely to shop on mobiles than their European counterparts, with 61% of consumers planning to buy their goods through this channel.
Given that last years 24 hour total was matched in just over 12 this year, that’s $5.673 billion worth of mobile transactions before lunchtime.
Retailers might also want to think about partnerships with local payment providers – 50% of mobile transactions use Alipay, and they registered 38,000 transaction per second in 2014, so enabling it on your website is hugely important.
Build the brand
Chinese consumers put greater emphasis on trust in brands, respond to different marketing techniques, and use different social media channels to those in the West, such as Qzone, with more than 650 million active users.
Singles Day is more than just a day, its months of campaigning and planning to give your brand the best chance of standing out – and foreign retailers would do well to concentrate on what makes their product special in a flooded market.
Emphasising heritage, particularly with typically English products, would be one way to differentiate oneself from competitors.
What does the future hold?
The Chinese market provides amazing opportunity for retailers to improve their export business.
The market is also highly localised, whilst learning first-hand is usually the best way, working with a local partner expedites a retailers learning and helps them avoid costly mistakes.
Just remember that up until the beginning of this year foreign companies were legally restricted from owning retail operations in China.
Such legal, cultural, and social nuances make finding a partner with local expertise an essential exercise to reap the rewards of a potentially hugely lucrative new market. Start your planning today to reap the rewards of Single’s Day 2016.