On November 11th last year, China’s e-commerce market surpassed the United States’ Black Friday and Cyber Monday with $3 billion in revenue in a period of under 24 hours. This one-day event that had been promoted through weeks of advertising is now the biggest e-commerce day in the world. Its effects are vast, driving millions of daily connections, purchases, logistics adjustments, and of course, revenue for brands and payment system providers.
Halfway between the October vacation period of Golden Week and National Day and Christmas, the e-tail bonanza on November 11th, or Singles’ Day (Guanggun Jie, 光棍节), started in 2009 when Taobao (Alibaba Group) launched several heavy promotions. The success was immediate, bringing in huge sales numbers thanks to China’s rapid e-commerce growth and consumers’ passion for promotions. As a result, Alibaba succeeded to turn a traditionally low season for retailers into the world’s largest e-commerce event.
From $15 million in revenue in 2009, the holiday has jumped to $760 million in 2011 and a stunning almost $3 billion last year. Compared with the $1.5 billion brought in by the United States’ Cyber Monday in 2012, it is clear how important this holiday is for retailers.
For Tmall, China’s biggest BtoC e-commerce platform, these 24 hours represented 7 percent of its annual revenues in 2012. On this site alone, a stunning 215 million people logged in and made 106 million transactions for a total of 13.2 billion RMB in revenue.
Such an important number of daily transactions caused many logistics issues, and global overtime activity for an entire month. As a result, providers now hire new staff specifically in preparation for this event in order to handle and deliver more than 50 million packages and handle an amazing amount of customer service activity.
What’s new this year?
We can be optimistic about the capacity of the Chinese e-commerce ecosystem to see even higher numbers than 2012 on Singles’ Day for a number of reasons. In June 2013, China’s number of internet users reached a number of almost 600 million, with 78 percent of them using a mobile phone. They are, on average, between 18 and 35 years old.
An important marketing strategy for the holiday has been to lead on mobile and social networks. At the same time, the increase in the efficiency of payment systems like Alipay, Tenpay, and the boom of WeChat as an O2O tool will likely spur sales. In addition, the online marketplace has greatly diversified with the development of Alibaba competitors like JD.com, Suning, Amazon, Yixun, Paipai, BuyQQ, Vancl, Jumei, and more targeted niche sites. Tmall has also created stricter regulations, providing a comprehensive memo with rules for all retailers willing to participate in the event on their platform.
As a result of these changes occurring in tandem with one another, one of the main trends we are likely to see the 2013 edition of Singles’ Day is that it will bring to light the strong connections between social media and e-commerce, as well as leverage the rise of mobile internet consumption.