What Single’s day means for global brands

Western brands have always thought of Boxing Day in the UK and Black Friday in the US as the watershed moments for digital sales – but Single’s Day in China obliterates both of them.This year, there was $1 billion in sales in the first twenty minutes. Single’s Day is a relatively new event – but marks how organized retail can create shopping events which act as a flashpoint for e-commerce sales.It is also a clear demonstration of how millenials are shaping e-commerce trends, and how brands can use these shopping events to drive sales. Mobile also came into its own this year with 46% of sales happening via mobile on Alibaba. E-commerce is a global tour de force, and Western brands need to plan for these events as part of their strategy in both emerging and established markets.Single’s Day Sets Global Sales RecordsWith 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 e-commerce. 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 mind-bending $9.3 billion, or a 63% increase over last year. For comparison, Cyber Monday spend in the US last year clocked in at $1.35 billion 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 AlibabaSingle’s Day is on 11 November, 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 $420 billion 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 10 November – one day before Single’s Day, all the Tesla Model S cars had already 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 SuccessThis 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 e-commerce 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% 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 BrandsThe 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 ChinaSingle’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.This article was written by MEC's Mudit Jaju, digital & data partner, Ecommerce Practice Lead and Cathy Li, digital strategy director, EMEA.