Sales set to boom on popular Single's Day
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E-mail Shanghai Daily, November 8, 2013
Single's Day, the pop culture "holiday" on November 11, has turned into a commercial bonanza for traditional and online retailers since Alibaba Group's Tmall, China's largest consumer shopping site, spun it into an annual sales event in 2009.
Single's Day emerged on campuses in the 1990s as a day when young people can celebrate their singlehood by partying, eating, exchanging gifts or just buying themselves something special. The timing was based on the date 11-11 - the so-called "bare sticks" that symbolize solitary individuals and sometimes refer to loneliness.
The day then became a great opportunity for vendors and service providers such as restaurants, karaoke outlets and match-making agencies to lure younger consumers.
As the spirit of the day spreads among millions of single Chinese, fanned by the younger generation of Internet users, Suning, Tencent's 51Buy.com and foreign chains like Japan's Uniqlo and the UK's Marks & Spencer are joining in the retail stampede this year to attract buyers with discounts, coupons, lucky draws and other sales gimmicks.
Retailers consider the day as something of a godsend as November is traditionally one of the slower months for sales.
Retailers aren't the only ones seeking to cash in on the popularity of Single's Day. Restaurants, karaoke parlors and cinemas are also geared up to tap the spending on the day.
Last year, Tmall said it hauled in 19.1 billion yuan (US$3.1 billion) on Single's Day, after offering discounts of at least 50 percent on a massive range of merchandise, which is equivalent to 1 percent of the 1.89 trillion yuan in total retail sales in October that year.
Flourishing sales
Jack Ma, chairman of Tmall's parent Alibaba Group, told Premier Li Keqiang during an economic conference in Beijing last week that sales on November 11 at the online shopping site might reach 30 billion yuan, or more than four times the total transaction volume of 6.9 billion yuan that Shanghai retailers reaped during the seven-day National Day holiday in October this year.
The total retail sales in China amounted to 2.07 trillion yuan in September.
Some retailers are not sitting and waiting and have started sales promotions in advance of November 11.
Suning, China's largest home-appliance retailer, which has started its own online arm, is running a four-day promotion through the weekend in collaboration with about 6,000 suppliers. Its brick-and-mortar stores are offering merchandise at the same price as Suning's Yigou online unit.
51Buy is offering 700 million yuan worth of discounts in a week-long sales promotion leading up to November 11. The online retailer said it wants to avoid an overwhelming crowd of consumers trying to buy goods on a single day.
Tmall Vice President Wang Yulei said about 20,000 merchants will be participating in this year's Single's Day sales campaign, double the number last year.
Tmall has the biggest share of the online consumer market at 51.1 percent, followed by 360Buy with 17.5 percent and Tencent with 6 percent.
China is home to the world's largest group of online shoppers. The industry revenue in the third quarter rose about two-fifths from a year earlier to 455 billion yuan, according to consultants iResearch Inc.
China's e-commerce spending may surpass that of the United States this year and reach 3.3 trillion yuan in 2015, Bain & Co said its annual China E-Commerce Report earlier this year.
Online retailing contributes to about 6 percent of all purchases in China, according to Bain's estimate. That compares with about 5.8 percent in the US in the second quarter, the Department of Commerce said.
Competition in the retail sector grows fiercer by the month. Bain's researchers suggested that multi-channel retailers are the ones most likely to triumph. According to a Bain survey of more than 1,300 domestic online shoppers in China's bigger cities, over 60 percent said a retailer's online store would increase their spending at a namesake brick-and-mortar store.
Blurring line
"Retailers need to reach Chinese consumers across all channels, including brick-and-mortar stores, online stores and mobiles, otherwise they will lose growth opportunities," said Serge Hoffmann, a co-author of the Bain report.
Indeed, the line between online and offline sales is blurring, as the Single's Day promotions highlight.
Apparel vendors like Uniqlo and Marks & Spencer have set up special zones in their stores for discounted items on November 11, and they also have linked up with Tmall to launch lucky draws for those who visit their stores and post pictures on their microblog accounts on the day.
Department stores such as Yintai Holdings Co are encouraging consumers to go to their shops to try out new products and then order online.
Beijing's Joy City said it welcomes shoppers to write down the barcode of products in its stores and then check the prices online. It is offering Tmall cash coupons for those who scan codes in the stores on November 11.
In another marketing strategy, retailers are using mobiles and social networks to attract buyers.
"It's a new trick for Tmall this year," said Hao Zhiwei, a veteran IT observer and columnist.
The e-commerce giant bought an 18 percent stake in Weibo, China's version of Twitter, for US$586 million in April.
"This is an opportunity to see whether the collaboration between Alibaba and Weibo will bear fruit on the commercial side," Hao said.
For its part, Tmall has promised buyers 300 million yuan of cash vouchers and is encouraging consumers to share gift coupons with friends.
Still, there are consumers who can't be bothered to sit in front of their computers waiting for bargains that could take days to arrive at their doorstep.
"I can go to a shop, buy a skirt and wear it the same day, so why all the bother of waiting for discounts?" said Crystal Xu, a Shanghai office worker in her late 20s.
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