Learning from the World's most important shopping day

Almost everyone knows, the largest shopping day in the world is not Black Friday. It’s not even the largest shopping event in the world in November! Singles Day was invented in 1993 by unmarried students at Nanjing University to get and receive gifts without getting married. The holiday being on “11/11”, represents 4 singles, and has morphed into an enormous pre-holiday shopping festival in China. This past Thursday, Chinese consumers spent an estimated USD139 billion primarily on two platforms – Alibaba and JD.com. To put that into perspective, that’s about 2x what the entire US supermarket industry sells…in an average month. Alibaba’s USD84.5 billion in sales Gross Merchandise Value (GMV) through their platform would make it the 18th largest retailer in the world in ANNUAL sales.

This year had some consistent themes that have become part of Singles Day – for instance, the flash sales on items like iPhones where JD.com sold almost USD16 million worth of phones in 2 seconds. In particular, the engagement of the luxury segment of the market is a critical difference between Singles Day and the US Black Friday experience – Alibaba’s Tmall Luxury division reported the participation of over 200 luxury brands in the fashion and cosmetics space. Though this event is distinct to China today, there are some interesting learnings that shed some light on some of the themes we think are most important headed into 2022 and beyond:

DISRUPTED BASICS

One of the key themes of 2022 planning is that both supply AND demand basics are upended. Supply through inflation and basic product availability, and demand through the continued shift in time and money spending prioritization driven largely by the pandemic. Alibaba showed their slowest YoY growth rate ever this year, attributing some of that slowdown to the uncertain supply and demand environment in China.

CHINA’S UNCERTAINTY

These disrupted basics in China have global implications. Some of Alibaba’s slower than anticipated Singles Day sales growth is attributable to intense pressure from the Chinese government on Alibaba to promote a less “consumerist” Chinese lifestyle, and one based more on “common prosperity”. China’s central governmental approach to commerce, retail, and the outside world seem to be shifting – this shift will be a major narrative of the months and years to come.

SUSTAINABLE/SOCIETAL COMMERCE

Alibaba, partially in response to the pressure above, leaned in heavily on China’s sustainability narrative and much of its Singles Day messaging was around societal betterment rather than spectacular sales. Tmall sold about USD16 million worth of “Green Commerce Vouchers” as part of its sustainability messaging. Alibaba’s CMO, Chris Tung remarked “In the early stages of 11.11, we focused on growth — the same way that parents would focus on a child’s height and strength. But as a child becomes a teenager, the parents shift their focus to nurturing the child’s sense of responsibility: the role he or she plays in society. That is what we’re doing now.” Another example here is the focus put on expansion of Singles Day beyond the Tier 1 cities, and to older populations, as both major platforms positioned themselves as broadening access to prosperity.

FROM STATIC TO DYNAMIC

Though livestreaming is not the core of the Singles Day experience, luxury brands found great success with it – and livestream commerce for high engagement categories will continue to be a more global trend in 2022 and beyond. In the pre-shopping event, Chinese influencer Austin Li Jiaqi (known as “Lipstick Brother”) sold almost USD2 billion in cosmetics in a 12-hour marathon livestream.

THE ”META”morphisis OF COMMERCE

NFTs made a splash, especially in pre-Singles Day events, with Alibaba’s Double 11 “Metaverse Art Exhibition” where brands like Burberry, Kiehl’s and Longines added NFT extras to special edition merchandise, all of which sold out extremely quickly. As is often the case, American and European businesses will discuss and theorize about something like the Metaverse while Chinese companies execute quickly, simply and learn/iterate.

Written by Bryan Gildenberg, SVP of Commerce for the Omnicom Commerce Group (OCG).