China's Singles Day is a strange little holiday created in the '90s by university students who thought the date 11/11 looked like four solitary stick figures. Somehow, it has evolved into the country's largest e-commerce shopping event, with Western brands eager to cash in.
How Western Brands Are Tapping Into China's Crazy-Big E-commerce Holiday
And for good reason: Last year's Nov. 11 was so big the transactions overloaded banks, and Chinese e-commerce giant Alibaba logged $3 billion in sales -- two times what U.S. retailers achieved on Cyber Monday.
China's e-tailing fest exploded out of nowhere. Alibaba, which is preparing for a much-awaited IPO, launched the holiday just five years ago with 27 brands. This year more than 20,000 brands are in the game, including many Western companies competing for the attention of China's booming middle class. In a country where only 44% of the population is online, the holiday has room to grow.
The date, also known as Double 11, is "a great time to be discovered," said Kevin Der Arslanian, analyst at China Market Research Group. "This is really a time when consumers are actively going online trying to find good deals, trying to find new items, and with the right combination of discounts and gifts, you can attract some new customers."
This time, many brands are experimenting with online to offline e-commerce -- shoppers can go to stores to check out merchandise in person, then scan a QR code with their cellphones to drop the item into their virtual shopping basket.
Total online sales by all retailers for the day last year aren't
clear, but Alibaba marketplaces Tmall and Taobao are considered by
far the biggest players on 11/11. Inside Tmall, which operates like
a virtual mall, shops from the Gap to Adidas to Toys "R" Us are
trumpeting discounts, coupons and free gifts for 11/11.
Tmall drives the holiday with promotion advice for brands, TV commercials, outdoor ads and an online teaser game site with rebates for prizes. It makes money through commissions from brands and retailers that operate inside its portal.
Microsoft launched a Tmall flagship in March and is taking part in Double 11 for the first time, though it hasn't revealed its offers yet. Brandon Yoon, senior director for Microsoft online stores in greater China, said he's curious to see how it plays out, especially since consumer electronics aren't typically a big seller on November 11.
"What a lot of people don't know is that the categories are really focused more on apparel and to some extent lifestyle products," Mr. Yoon said. Consumer electronics, however, is growing. He said he's seeing retailers shift away from just price-slashing on the date and instead offering unique 11/11 bundles or gifts.
Clarins, the French luxury skin-care brand, joined Tmall in September. Leading up to Nov. 11, it has encouraged fans on the Weibo microblogging platform to share photos of their Clarins products for a chance to win freebies; on Nov. 11 it will match shoppers' purchase amount with the same amount in gifts.
"We have an ambitious sales target, up to a month and a half's worth of sales in a single day," said Julien Chiavassa, Asia Pacific regional digital and e-commerce head for Clarins.
Alibaba launched the e-commerce holiday in 2009 to liven up a slow shopping period between October's National Day and Chinese New Year in January or February. It chose 11/11 because the date was easy to remember.
The e-commerce giant originally called the shopping event "Singles Day" -- or in literal translation, "Bare Sticks Day," describing the visual look of 11/11. (In China, singles are sometimes called "bare sticks.") Making it clear the event is not only for singles, Tmall rebranded the event two years ago as "11/11 Shopping Holiday."
The 2012 event was so big that it brought hiccups, including payment-system failures at some branches of China Construction Bank. To improve deliveries, Alibaba says its logistics partners are increasing warehouse space and boosting personnel by 60%. Alibaba is also more than doubling its network bandwidth to 5 terabytes.