Dr. Wordman
My readers may wonder why is Dr. Wordman interested in the title topic? Is it important and related to world politics and US-China relations? Singles Day Event did not exist when Dr. Wordman built his first e-Commerce website, osmart.us (originally started as osmart.com but that name was first used by a department store). OSMART stands for Online Shopping Mart or O! Smart! with a grand vision. (Believe it or not, stores like Macy’s etc all placed their sales on osmart.us) OSMART was promoted as a ‘mega’ e-Commerce site in year 2000. Well, OSMART did not fly as it was suffocated by ‘dotcom crash’. However, for sentimental reasons and patent filing purpose, osmart.us has been kept as a historical archive website still accessible today. With the above explained, you will understand why Dr. Wordman is interested and somewhat experienced in discussing the title subject. The subject indeed relates to US-China trade war and globalization.
The Singles Day online shopping event, happening on November 11th, (Well known as Double 11 in China) was started and promoted by Alibaba.com ten years ago (2008). Today, Double Eleven clicked in the biggest shopping spree the world had ever seen; shoppers purchased 314 RMB ($45B) goods and services within 24 hours. What drove people to Double 11? Of course it is discount sales. (OSMART was based on that principle) Average discount of 30% or more were offered by merchandisers on that day. Would merchants make profit? Here are some statistics McKinsey published: For Mom and baby stuff, merchants get 18-19% sales on Double 11 versus 6-7% on normal days, that is, at least 300% increase of sales for offering a 33% marked-up ‘discount’. For skincare and cosmetics, merchants get 12-15% sales on Double 11 versus 3-5% on normal days for offering a 30% marked-up ‘discount’, that is, 300-400% increase in sales on one day. You do the math, would you want to miss this kind of opportunity to get sales, brand recognition and customer base? By the way, $45B is about three times of sales of U.S. Black Friday and Cyber Monday combined. Furthermore, 90% of the Double 11 sales happen on mobile devices versus 34% for Cyber Monday.
According to McKinsey (What Singles Day Event Can Tell Us How Retail in China Is Changing, Lombard Bu, Anne Kronschnabl, Kelly Ungerman and Daniel Zipser, December 2018, McKinsey) the Singles Day Event grew 79%, 59%, 44%, 44% and 24% from 2014 to 2018, tapering off this year. (with sales volume 81B,123B, 177B, 254B and 314B RMB) Would you be concerned that this event will die? This year’s Singles Day featured at least four other retail platforms or ecosystems of companies, with Alibaba capturing 68 percent of total sales. The 24% growth was compatible with China’s retail growth which suggests that Double11 may have to expand more into global markets. It appears that it is going that way. McKinsey reported, for example, online games and interactive shows, including a “See Now, Buy Now” fashion show that let consumers buy items featured on models, helped creating excitement leading up to Singles Day. The actual day kicked off with a four-hour, star-studded gala of performances in Shanghai’s Mercedes-Benz Arena, watched by 240 million viewers. Games and coupons cross offered from online and in-store retailers are obviously also helping exciting the massive consumers.
This year for Singles Day, e-commerce giant Alibaba made a concerted push to connect its online operations with its stores throughout China, that is consumers could find the Singles Day promotions and offers offline as well, in 62 Intime department stores, around 100 Hema supermarkets, and 222 Easyhome furniture and home-improvement stores. But it is obvious that to sustain growth and promote further Double 11, Alibaba must move to global markets. Amazingly, a record number of multinational brands (more than 19,000) already participated in Singles Day, resulting in a major spike in sales from imports.
It is important to emphasize that while overall Singles Day sales grew by 24 percent, the growth of products imported into China was much higher, at 63 percent on Tmall. This is a significant data in view of the US-China Trade War demanding an increase of exports from the U.S. to balance the current trade deficit. McKinsey noted the top-selling multinational brands on Tmall, including Spanish beauty company MartiDerm, Japanese diaper brand Moony, Dyson appliances, and the US supplement brand Schiff. Alibaba’s Tmall offers access to a large consumer base and a wide range of supporting capabilities, such as data analytics, logistics, and product innovation, potentially capable of facilitating more global sales.
For example, Lazada, approximately 91 percent owned by Alibaba, featured Singles Day in Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam simultaneously with its initial sales during the first hour of Singles Day growing sevenfold over last year. Shopee, the leading online shopping platform in Southeast Asia and Taiwan, grew its total customer orders on Singles Day by 4.5 times. Why can’t the U.S. retailers join the growth? I don’t think it is because the U.S. has no merchandise for exporting to China, it is the atmosphere and attitude the government is casting over U.S.-China trade. We hope that the U.S. will reach a trade agreement with China soon, so the U.S. businesses can ramp up more global sales especially to China.
Alibaba has publicly said its long-term goal is to get half of its total sales from overseas. Alibaba already brought Singles Day to the United Kingdom, France, Spain, Poland, Russia, and Turkey through AliExpress, an online site that exports Chinese products to international buyers. In Europe, AliExpress partnered with El Corte Inglés department store to create more than 2,000 click-and-collect pickup locations, including pop-up stores. This year, AliExpress’s total sales on Singles Day were up 40 percent. As Alibaba and other Chinese retail platforms continue their expansion abroad, we should expect the U.S. capturing a significant growth in Singles Day sales among Europe, Southeast Asia and other markets.
Singles Day sales growth tapering from 44% to 24% is just a single data point for one year when the U.S. and China are saber rattling threatening each other with a tariff war. The Singles Day event has a solid five year record and is certainly still a behemoth for Chinese retail, thus representing a significant opportunity for the U.S. brands to grow in China. According to McKinsey’s assessment, participating in Singles Day is no longer optional but a requirement for any international brand that sees itself with a future in Asia and wants to build brand engagement and craft unique experiences with consumers. I fully agree on this assessment. Therefore, I urge the U.S. commerce organizations immediately conducting a task force to develop a plan to fully engage with Singles Day (Double 11) Event to stimulate the U.S export to China and make it a success. I personally will be glad offer consulting free of charge on Mandarin language and/or business needs to any American businessman who is interested in engaging the Singles Day Event (Double 11).
My readers may wonder why is Dr. Wordman interested in the title topic? Is it important and related to world politics and US-China relations? Singles Day Event did not exist when Dr. Wordman built his first e-Commerce website, osmart.us (originally started as osmart.com but that name was first used by a department store). OSMART stands for Online Shopping Mart or O! Smart! with a grand vision. (Believe it or not, stores like Macy’s etc all placed their sales on osmart.us) OSMART was promoted as a ‘mega’ e-Commerce site in year 2000. Well, OSMART did not fly as it was suffocated by ‘dotcom crash’. However, for sentimental reasons and patent filing purpose, osmart.us has been kept as a historical archive website still accessible today. With the above explained, you will understand why Dr. Wordman is interested and somewhat experienced in discussing the title subject. The subject indeed relates to US-China trade war and globalization.
The Singles Day online shopping event, happening on November 11th, (Well known as Double 11 in China) was started and promoted by Alibaba.com ten years ago (2008). Today, Double Eleven clicked in the biggest shopping spree the world had ever seen; shoppers purchased 314 RMB ($45B) goods and services within 24 hours. What drove people to Double 11? Of course it is discount sales. (OSMART was based on that principle) Average discount of 30% or more were offered by merchandisers on that day. Would merchants make profit? Here are some statistics McKinsey published: For Mom and baby stuff, merchants get 18-19% sales on Double 11 versus 6-7% on normal days, that is, at least 300% increase of sales for offering a 33% marked-up ‘discount’. For skincare and cosmetics, merchants get 12-15% sales on Double 11 versus 3-5% on normal days for offering a 30% marked-up ‘discount’, that is, 300-400% increase in sales on one day. You do the math, would you want to miss this kind of opportunity to get sales, brand recognition and customer base? By the way, $45B is about three times of sales of U.S. Black Friday and Cyber Monday combined. Furthermore, 90% of the Double 11 sales happen on mobile devices versus 34% for Cyber Monday.
According to McKinsey (What Singles Day Event Can Tell Us How Retail in China Is Changing, Lombard Bu, Anne Kronschnabl, Kelly Ungerman and Daniel Zipser, December 2018, McKinsey) the Singles Day Event grew 79%, 59%, 44%, 44% and 24% from 2014 to 2018, tapering off this year. (with sales volume 81B,123B, 177B, 254B and 314B RMB) Would you be concerned that this event will die? This year’s Singles Day featured at least four other retail platforms or ecosystems of companies, with Alibaba capturing 68 percent of total sales. The 24% growth was compatible with China’s retail growth which suggests that Double11 may have to expand more into global markets. It appears that it is going that way. McKinsey reported, for example, online games and interactive shows, including a “See Now, Buy Now” fashion show that let consumers buy items featured on models, helped creating excitement leading up to Singles Day. The actual day kicked off with a four-hour, star-studded gala of performances in Shanghai’s Mercedes-Benz Arena, watched by 240 million viewers. Games and coupons cross offered from online and in-store retailers are obviously also helping exciting the massive consumers.
This year for Singles Day, e-commerce giant Alibaba made a concerted push to connect its online operations with its stores throughout China, that is consumers could find the Singles Day promotions and offers offline as well, in 62 Intime department stores, around 100 Hema supermarkets, and 222 Easyhome furniture and home-improvement stores. But it is obvious that to sustain growth and promote further Double 11, Alibaba must move to global markets. Amazingly, a record number of multinational brands (more than 19,000) already participated in Singles Day, resulting in a major spike in sales from imports.
It is important to emphasize that while overall Singles Day sales grew by 24 percent, the growth of products imported into China was much higher, at 63 percent on Tmall. This is a significant data in view of the US-China Trade War demanding an increase of exports from the U.S. to balance the current trade deficit. McKinsey noted the top-selling multinational brands on Tmall, including Spanish beauty company MartiDerm, Japanese diaper brand Moony, Dyson appliances, and the US supplement brand Schiff. Alibaba’s Tmall offers access to a large consumer base and a wide range of supporting capabilities, such as data analytics, logistics, and product innovation, potentially capable of facilitating more global sales.
For example, Lazada, approximately 91 percent owned by Alibaba, featured Singles Day in Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam simultaneously with its initial sales during the first hour of Singles Day growing sevenfold over last year. Shopee, the leading online shopping platform in Southeast Asia and Taiwan, grew its total customer orders on Singles Day by 4.5 times. Why can’t the U.S. retailers join the growth? I don’t think it is because the U.S. has no merchandise for exporting to China, it is the atmosphere and attitude the government is casting over U.S.-China trade. We hope that the U.S. will reach a trade agreement with China soon, so the U.S. businesses can ramp up more global sales especially to China.
Alibaba has publicly said its long-term goal is to get half of its total sales from overseas. Alibaba already brought Singles Day to the United Kingdom, France, Spain, Poland, Russia, and Turkey through AliExpress, an online site that exports Chinese products to international buyers. In Europe, AliExpress partnered with El Corte Inglés department store to create more than 2,000 click-and-collect pickup locations, including pop-up stores. This year, AliExpress’s total sales on Singles Day were up 40 percent. As Alibaba and other Chinese retail platforms continue their expansion abroad, we should expect the U.S. capturing a significant growth in Singles Day sales among Europe, Southeast Asia and other markets.
Singles Day sales growth tapering from 44% to 24% is just a single data point for one year when the U.S. and China are saber rattling threatening each other with a tariff war. The Singles Day event has a solid five year record and is certainly still a behemoth for Chinese retail, thus representing a significant opportunity for the U.S. brands to grow in China. According to McKinsey’s assessment, participating in Singles Day is no longer optional but a requirement for any international brand that sees itself with a future in Asia and wants to build brand engagement and craft unique experiences with consumers. I fully agree on this assessment. Therefore, I urge the U.S. commerce organizations immediately conducting a task force to develop a plan to fully engage with Singles Day (Double 11) Event to stimulate the U.S export to China and make it a success. I personally will be glad offer consulting free of charge on Mandarin language and/or business needs to any American businessman who is interested in engaging the Singles Day Event (Double 11).
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