MEC POINT OF VIEW:
Single’s Day Obliterates Sales Records:
What This Means for Global Brands
Single’s Day Sets Global Sales Records
With Cyber Monday in the US and Boxing Day in Western Europe on the horizon, there is much musing on how
2014 will net out for global ecommerce. While important, the biggest online shopping day in the world just ended
and it was bigger than anyone had imagined. Single’s Day may not be well known to Western audiences, but is a
juggernaut in China. As final numbers still trickle in, Alibaba reports that this year’s Single’s Day sales were a mindbending $9.3 billion, or a 63% increase over last year. For comparison, Cyber Monday spend in the US last year
clocked in at $1.35B according to comScore. Alibaba tweeted that it hit its first billion yesterday in seventeen
minutes flat. Single’s Day this year didn’t just break sales records – it annihilated them.
Role of Alibaba
Single’s Day is on November 11, a day when young single people give each other gifts and celebrate singledom,
hoping to meet a special someone at the celebrations that happen across China. Alibaba, which owns Taobao and
Tmall – which are respectively comparable to eBay and Amazon – is often credited with giving Single’s Day its
present shape. With projected 2014 sales of $420B this year, Alibaba is one of the world’s largest retailers and is
only just hitting its stride. Following a bombastic IPO earlier this year, its sights are set squarely on the West. Tmall
particularly has been setting up partnerships with global brands to manage logistics and sales from outside of
China and use Tmall as largely a front-end. Costco Wholesale and Tesla Motors are the two most prominent
examples of such. With Costco Wholesale setting up store front on Tmall, Chinese consumers can now buy brands
such as Nature Made, Kirkland and Cetaphil directly instead of going through a procurement service. Breaking
away from its direct sales model, Tesla brought its Model S to the Tmall platform on October 20 to prepare for the
Single’s Day sales. However, by November 10 – one day before Single’s Day, all the Tesla Model S cars had already
been sold out.
It’s not all rosy for Alibaba – they are being aggressively challenged on the home turf by foreign entrants. Amazon
launched Z.cn on Single’s Day this year to let Chinese buy American products from brands such as Christian Dior &
Gillette from the US with access to American reviews and prices with 3-10 day delivery. This instantly doubles the
importance of Amazon to brands and makes it the one platform to talk to consumers in the two biggest
ecommerce markets.
Mobile, Social and Youth Drive Single’s Day Success
This year, Single’s Day also became truly mobile first 42.6% of sales via mobile. Brands must grasp how thoroughly
mobile has reinvented the way we shop. Mcommerce is as mainstream as any other form of shopping, especially in
a country with 90% mobile penetration. In a country as vast as China it also allows consumers in the more remote
regions to be able to shop without having to rely on expensive wired connections. Mobile shopping is also
inevitably social. JD.com, China’s largest personal electronics etailer has leveraged its partnership with Tencent to
make the purchase experience run smoothly within WeChat and QQ, which resulted in astronomical conversions
via mobile. Single’s Day is also the epitome of how millennials are shaping global ecommerce trends.
From inception, Single’s Day is about youth and young people – and millennials in particular are driving the shape
of ecommerce to come. There are 485 million of them, and in APAC they are particularly digitally savvy – with 69%
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of them having made an online purchase according to GWI. Brands have to understand how to millennials are just
wired differently and will not turn into the boomers if you give them enough time.
Competing with Chinese Brands
The clear winners during this one day sale are predominantly Chinese brands. They have significant local market
advantages on logistics and cultural awareness – but are also willing to engage in ruthless price wars. According to
TMall, all top 10 brands by sales this year were Chinese with mobile manufacturer Xiaomi leading the way. A
foreign brand like Samsung can avoid cutting into their margins by having consistent content to build a
relationship with consumers to command a premium during Single’s Day, when purse strings are loosened.
Single’s Day Beyond China
Single’s Day has implications far beyond China. We will see local event-based online shopping days emerge in all
major markets – perhaps around Diwali in India or New Year’s Day in Turkey. Brands need to prepare for these tent
pole events and develop strategies for how they can use these massive spikes to drive ongoing brand engagement.
Brands also need to have digital infrastructure that allows them to deliver on this – Flipkart in India organized a Big
Billion Sale Day and their servers promptly crashed leaving them with egg on their face. The success that Alibaba
have had in China is too massive for retailers in other countries to ignore. Brands need to be constantly listening to
cultural shifts in the ways people buy because ecommerce enables these changes to happen very quickly.
Further Questions
If you have further questions regarding Single’s Day or ecommerce, please contact one of your account leads or
one of the authors:
Mudit Jaju, Digital & Data Partner, Ecommerce Practice Lead ([email protected])
Cathy Li, Digital Strategy Director, EMEA ([email protected])
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