How will China’s Singles Day Impact US Retail?
The world’s largest shopping day is about to begin and you might not even know it. November 11th marks the annual return of Singles Day, a Chinese online shopping bonanza that has exploded in growth in recent years. Last year, the online retail behemoth Alibaba recorded $9.3 billion in sales, smashing previous records.
A Brief History of Singles Day
Singles Day began in Nanjing University in the early 1990s, when a group of single male students began “Bachelors Day” celebration (hence the date selection of 11/11). In China, there exists strong pressure from families for children to marry early, and due to the country’s significant gender gap there are far more young men than women. Frustrated single men were in dire need of an outlet, and thus, the holiday’s popularity expanded rapidly. In the span of a few decades, the organic bachelor’s celebration has morphed into a national, possibly global, phenomenon. The real game changer came in 2009, when Alibaba sponsored its first online sale coinciding with the Singles Day to wild success. In the six years since, year-over-year sales growth has averaged 640%! Today, Singles Day participants (both men and women) purchase gifts for themselves and attend singles parties, often at karaoke bars. Alibaba offers heavy discount sales for 24 hours to incentivize purchasing – the entire nation participates, whether single or not.
Singles Day by the Numbers
The sheer volume and scope of Singles Day is dizzying. At over $9 billion in total sales, Singles Day far outpaces Black Friday and Cyber Monday in the US ($2.9b). This chart from Business Insider (right) depicts the day’s rapid growth. Singles Day 2014 Statistics
- Online Shoppers: 400 million
- Packages shipped: 500 million
- Number of merchants: 47,000
- YoY sales growth: 640%
Is this an Opportunity for US-based Retail or American Consumers?
Alibaba’s goal is to make Singles Day a global holiday; however, experts believe significant spillover success is unlikely. Singles Day lands on an established US holiday (Veteran’s Day) and is also just weeks away from the traditional holiday shopping kick-off on Black Friday. Essentially, US retailers and consumers are preoccupied. On the retail side, Alibaba stepped up efforts to recruit western companies, including American Eagle and COSTCO, to its TMall eCommerce platform. The largest US consumer brands have both the resources and reach to penetrate Chinese markets during an already busy retail season. Western brands are also associated with quality and prestige in China, so Singles Day could be an excellent introduction to a growing Chinese consumer population.