Singles Day 2015
China’s Singles Day has become a beloved national holiday, the biggest shopping day in the world, and has changed the face of eCommerce not only in China, but globally. What is it about this newly invented commercial holiday that grabbed the hearts and wallets of Chinese consumers?
There are a few versions of the Singles Day origin story floating around, but it is generally accepted that some lonely male undergrads at Nanjing University invented the day in the early ’90s to celebrate/mourn being single. They chose November 11 because the four 1s in the date, 11/11, represented singles. It was a day to gather with other single friends, go to bars, hold blind date parties and try your luck at meeting someone new. It soon spread to other campuses in Nanjing and then to campuses around the country. Not long after that it started to leak into the mainstream and in China became a popular alternative to Valentine’s Day.
There were early signs of what it would become in the future because people started buying themselves gifts, spent a lot of renminbi on food, drinks, and small parties. In 2009 Alibaba recognized the commercial potential of the day and started running massive sales on its shopping websites, Taobao and Tmall, and encouraged brands to participate. Just 27 merchants joined the first 24-hour sale.
Over time, bars, restaurants, and retailers began promoting the holiday. But its greatest expression of pure commercialism was manifested online. By 2013 Alibaba, which calls the event the 11.11 Global Shopping Festival, realized $5.8 billion in GMV (sales) on the day and last year, with 27,000 retailers participating, $9.3 billion in GMV … in one day. That’s more turnover than sales generated on Black Friday weekend and Cyber Monday combined.
Fast forward to China today. Over the last few decades, the country’s spectacular economic rise spawned a middle class, that according to a recent report from Credit Suisse is now larger than the U.S. middle class. China has also surpassed the U.S. in its population of billionaires, and is now home to more than 4 million seven-figure households.
It is this Chinese middle class (which by some estimates will double to more than 300 million people in the next decade, exceeding the entire U.S. population) that is driving consumption in China. Like their American forebears, these consuming newbies are spending on new homes and the modern conveniences to fill them with. They are dining out; they are traveling in record numbers and buy more cars than any country in the world. And they are being advertised to,everywhere, all the time.
So it’s not surprising, rather it was almost inevitable, that traditional holidays have been commercialized in China as they were in the U.S. The country’s National Day (celebrating the founding of the PRC) and Spring Festival (Chinese New Year) are now seven-day shopping sprees known as “Golden Weeks.” Meanwhile, a recently invented holiday became not only a celebration of being single, meeting new people and having fun, but an excuse for retailers to slash 40%-60% off regular prices.
In many ways the success of Singles Day can be explained by the fact that Chinese consumers think and act just like consumers around the world and Chinese companies/brands want to market and drive profit at holiday time like companies around the world. History repeats itself.
Singles Day—Alibaba’s 11.11 Global Shopping Festival—is evolving with them. The sale is a chance to discover new brands—more than 5,000 international brands from 25 countries are participating in the 11.11 festival this year—and pay full price for the right products, as evidenced by the fact that during the sale last year, online shoppers purchased tens of thousands of new cars. As Jeff Zhang, the chief of Alibaba’s China retail marketplaces, recently pointed out, the 11.11 festival is no longer “just for shopaholics.”
“It’s more like Christmas,” Zhang said.
Michael Zakkour, Vice President, China/Asia Pacific Practice, Tompkins International. Author of best-selling business book China’s Super Consumers.