Venkatesh Shankar, November 8th, 2019
11/11 or November 11 is celebrated as the Singles day that witnesses the largest online sales, in particular, among Chinese people. The November 11 date was chosen to appeal to potential shoppers who are single because it contains multiple instances of the number one. This year, it is expected to ring in the biggest single day sales online anywhere in the world. Think of Amazon on steroids!
Led primarily by Alibaba, the Chinese tech behemoth, sales revenues from Singles Day has taken off from just $7.8 million in 2009 to $30 billion in 2018 for Alibaba. Not far behind was Alibaba’s main Chinese rival, JD.com, which sold $23 billion over 10 days surrounding Singles day last year. This year, Alibaba expects to sell $37 billion worth of products through its Tmall online marketplace. By comparison, the combined sales from Black Friday, Cyber Monday, and Thanksgiving day in 2018 was $29 billion! In fact, Singles day sales revenues could surpass the GDP of countries like Bolivia and Serbia!
This year, Alibaba promises to offer over 1 million products from 200,000 Chinese and global brands, including about 3,500 categories from 78 countries. About a quarter of American retailers have expressed an interest to participate in the event this year. Even Kim Kardashian is launching a new line of fragrances on Singles day. However, the U.S.-China trade imbroglio could throw some cold water on the success of American brands. About three-fourths of Chinese consumers were unsure about their intention to purchase U.S. products on Singles day.
An interesting way in which sales takes place is through livestreaming. Livestreaming commerce at Alibaba include products ranging from cosmetics to cars with flash exclusive deals on items that attract hordes of shoppers.
What is the significance of Singles day for the future of retailing? By 2022, Chinese middle-class shoppers are predicted to surpass U.S. shoppers both in number and (550 million vs. 340 million) spending. By being online, Singles day allows U.S. brands and retailers to leverage a large global shopper base.
This trend bodes well for retail’s future. In the future, retailing will be further driven by experience and technology. Globally, commerce is accelerating online as shoppers use their mobile devices to browse, compare, click, purchase and return items, and communicate with others and retailers. Does this mean that physical stores are going out of fashion? True, many predominantly brick-and-mortar retailers such as Forever 21 and Sears are closing several stores. But far from the doomsday scenario predicted for brick-and-mortar stores, retailers are going omnichannel with digitally native retailers such as Amazon, Warby Parker, and Bonobos opening more stores.
What’s driving these changes? Shoppers demand 360-degree access to retail from multiple touchpoints and seamless shopping experience. Customer experience is defining retail disruption. Artificial Intelligence (AI) is reshaping both the demand and supply sides, including customer relationship and inventory management, as AI is being deployed at scale. Technology will accelerate “chore” shopping routines, while experience-focused initiatives will drive “cherish” shopping tasks. Retailing is becoming increasingly AI-driven, mobile-led omnichannel.
And global sales growth on Singles day is a harbinger retailing’s future.