Singles Day 2015: How Did Western Brands Perform?
This year, Singles Day demolished all previous sales records. Savvy Western retailers and brands saw a big lift in sales and revenue. Read our exclusive findings—and our recommendations for Singles Day 2016.
This article originally appeared as a guest post in Multichannel Merchant.
Singles Day 2015 recently came and went, and more than a few Western retailers are surely envious at how Chinese companies fared during the November 11 sales event—the biggest online shopping day of the year.
Indeed, the scale of this e-commerce sales event is something Western shoppers barely understand. Remember the crazed bonanza of last year’s Black Friday and Cyber Monday sales? Those days generated $4 billion for U.S. retailers.
When the dust settled, Singles Days sales eclipsed $14.3 billion. This statistic solely represents sales generated at online marketplaces owned by Alibaba Group Holding Ltd. It doesn’t include the additional billions generated at competing sites, like JD.com.
What’s fueling this astonishing shop-a-thon? Deeply-discounted deals. On Singles Day, prices drop by 50% or more, for products ranging from digital devices to diapers. Alibaba-owned sites such as Tmall.com receive the lion’s share of these sales.
Last year, these virtual malls generated $9.3 billion in Singles Day-related sales, a 60% increase over 2013. This year’s $14+ billion windfall represented another 60% year-over-year increase.
The shopping holiday isn’t just for Chinese companies anymore. Savvy Western brands are getting wise, and getting a piece of the action.
Indeed, more than 15,000 global companies participated in Singles Day 2015; many of them launched stores on sites like Tmall for the occasion. Iconic brands such as Macy’s, Estée Lauder, Nike, Apple, P&G, Unilever, and others were on display. European companies also participated, including Spanish apparel retailer Zara, luxury retailer Burberry and many more.
Interestingly, not all Western brands sell their goods in virtual malls. Many launch localized, branded e-commerce websites for the Chinese market.
Several of these companies are MotionPoint clients. Based on our analysis, these sites also benefit greatly from being in-market on Singles Day. We noted these, and other, significant increases on Nov. 11, compared to the YTD average:
- Traffic grew by an average 92%, compared to 82% in 2014
- Conversion rates increase 122%, compared to 10% in 2014
- Sales skyrocketed 1,384%
Our in-depth knowledge of the Chinese market suggests that several key product sectors will grow exponentially in upcoming Singles Days. One is the “mother & baby” product category. Since China rescinded its “one-child rule” (which now permits families to have two children legally), expect a resulting surge in maternity and childcare sales, especially among Western-branded products. Chinese consumers prefer Western brands; in fact, Kimberly-Clark’s Huggies products were a top-seller during last year’s Singles Day. This preference provides a compelling opportunity for child apparel, childcare and related companies to serve the Chinese market.
In fact, it might take pressure off other brands. Australians are currently experiencing a Singles Day-related shortage, since millions of Chinese consumers purchased an Aussie-made formula at discounted prices.
Western brands might be seeing a lift from Chinese shoppers, but retailers that are trying to generate interest in the U.S. for Singles Day aren’t seeing much traction.
Despite stateside support from such retail powerhouses as Walmart, American consumers aren’t engaging. U.S. Singles Day sales increased 14% from 2014 to 2015, but still generated only $1.4 billion. That’s far below the $3 billion analysts project America’s homegrown online-exclusive event, Cyber Monday, will deliver this year.
We operate a localized Chinese website for one U.S.-based retailer that participated in this year’s Singles Day. Our data suggests the site’s promotions generated a relative increase in U.S. interest and sales, but they couldn’t compare to the impact we saw on sites in the China mainland market.
Another retail site we operate in Spanish also promoted Singles Day sales to U.S. Hispanics, but this site didn’t see a measurable increase in sales at all. This suggests Singles Day may be a uniquely Chinese e-commerce event, resonating with bargain hunters from some cultures far more than others.
As widespread as it may seem, Singles Day isn’t a formal holiday. Its roots hail back to 1990s Chinese university campuses, where it was celebrated as a kind of anti-Valentine’s Day. In 2009, Alibaba branded the day as “Double 11,” encouraging singles to splurge on discounted items. The rest is a marketing success story.
Indeed, this year, Chinese anticipation reached a fever pitch well before Nov. 11. The hashtag #Double11# had trended on Chinese social network Weibo for more than a month, generating billions of impressions.
According to Alibaba, 80% of all Chinese online shoppers participated in Singles Day, generating about 120,000 of orders each minute. Nearly 70% of sales were made on mobile devices, compared to around 40% in 2014.
And while Singles Day’s total sales—$14.3 billion—is certainly worthy of awe, it still represents a mere fraction China’s online buying power. Last year, Chinese consumers spent more than $450 billion online. That figure will grow to $1 trillion by 2018.