Singles Day 2020 – What Can We Learn? 6 Key Takeaways
Author: Elliott Jacobs
November 13, 2020
Many have recently looked to China to signal how the rest of world might recover from the pandemic. Whilst China’s situation is unique, with exports and government spending driving recovery, there are learnings we can take from the slow and steady return to consumer spending, partly enabled by the uptake of digital commerce innovations.
With Singles Day – this year a multi-day event – having taken place this week just as we enter the traditional peak shopping period, it’s worth watching how Chinese retailers engaged with customers this see if there’s anything we can learn.
Record Singles Day – 2020 By Numbers
– Alibaba reported record sales of $75 billion, an increase of 26% on last year.
– JD set its own record of $41 billion during the event, growing 33% compared to last year.
– 16 million products were on offer, with 250,000 brands, 5 million online retailers and 800 million consumers participating.
– The number of orders during a peak period were reported to be 583,000 per second.
– Cainiao, the logistics arm of Alibaba, said it is using more than 3,000 chartered flights and long-haul cargo ships to bring goods into China.
– Three million people across Cainiao and its partners were involved in the logistics globally.
– Luxury firms including Prada, Cartier, Montblanc, Piaget, Balenciaga, Vacheron Constantin, and Chloé took part for the first time, joining around 200 luxury brands – more than double last year’s figure.
Extended Discount Period
Singles Day is usually held on November 11. This year, Alibaba announced an additional sales period, from Nov 1-3. Although much closer together, this approach mirrored Amazon’s double-whammy of discount periods. Amazon shifted Prime Day to October this year, as opposed to its usual summer slot, to kick-start the holiday shopping season early before its second major discount period of Black Friday.
What can we learn?
This reflects the growing trend of ‘Black November’ in recent years, where retailers extend Black Friday sales throughout the month, allowing increased opportunities for consumers to spend, whilst also giving retailers and the brands the chance to trial, learn from, and refine campaigns across these periods, before a critical 24-hour peak.
Spreading out these discount days to multiple days or weeks also lightens the load on warehousing, shipping, returns and customer service operations. This is crucial during what will most certainly be the most pressured holiday season to date for eCommerce.
Livestreaming is nothing new, but takes on new relevance with modern channels. Think QVC in the digital age, supercharged by social media platforms. This has gone mainstream in China, with sessions hosted by social influencers trialing new products, which can be purchased in real-time through embedded links.
Social media targeting means brands and retailers can curate products to each audience, delivering extremely high conversion rates and ROI. Taobao claimed a 65% conversion rate in livestreaming campaigns in 2018.
It’s particularly powerful during time-specific periods like Singles Day, with product launches, prize draws, and limited-time offers creating urgency. During Singles’ Day in 2019, an eight-hour livestream on Taobao led to 43.15 million buyers. For Alibaba, livestreaming on Singles’ Day alone accounted for $2.85 billion in sales. This year, Cartier hosted its first live-streaming show on Taobao Live, showcasing a $28.3m necklace to 800,000 people.
What can we learn?
The Europe and US are catching on. Think Rihanna’s fashion shows streamed on Amazon, allowing people to buy the products they saw in the show directly from the stream. Kohl’s also ran a livestreaming event at New York fashion week, using the Periscope and Meerkat apps to drive a real-time mobile audience. With TikTok, Instagram, Snapchat, Facebook and YouTube also building their livestreaming efforts, expect to see further brands moving into this space.
TikTok and Short Video
Talking of TikTok, don’t expect this year’s social phenomenon to go away any time soon. Short video apps are a huge hit with Millennials and Gen Z, with content ranging from product reviews and unboxing, to lip-syncing and lifestyle. Thanks to the monumental data that the Chinese super apps have access to, content can be incredibly targeted to audience preferences and interests.
Apps such as TikTok and Kwai are used by over 70% of mobile users in China, and the amount spent on them has increased by 8.6% YOY, to over 22 hours per month. That’s a lot of potential quality engagement for brands, and the apps have built out their offerings to capitalize on this. TikTok recently added an eCommerce feature allowing brands to target consumers with specific products.
What can we learn?
TikTok went global in 2020, feeding the obsession brands have with targeting younger consumers, 41% of TikTok users are aged between 16 and 24. For TikTok to make a real dent in the pockets of Facebook, Instagram and Snapchat, it will need to address concerns about transparency in its ad performance. But expect to see TikTok widely used by brands during its first big Black Friday this year.
The second-life eCommerce market is expected to reach $178 billion in 2020, driven by today’s more conscious consumers and their demand for sustainability and affordability. This trend lends itself to online users, where shoppers can easily access a greater choice of items. There are 99 million users of resale apps in China. Alibaba and Tencent are leading the way as ever, with their Xianyu and Zuanzhuan respective offerings.
What can we learn?
Rental and re-commerce models aren’t specific to China. It’s been big business ever since the emergence of eBay, given new life with recent global climate and sustainability concerns. Recommerce was big news at New York’s NRF Big Show, and the US’s The RealReal – valued at over $2 billion – and the UK’s Farfetch’s Second Life are leaders.
Brands are trying to get a slice of the $20 to $28 billion fashion resale market — expected to more than double in the next four years. The resale of clothing through curated platforms has grown 21 times faster than the retail apparel market in the last three years, with 26% of luxury shoppers saying they now buy second-hand.
More recently, we’ve seen Levi’s, Gucci and IKEA (this movement isn’t just in fashion) invest in second-hand resale models. The message is focused on community marketplaces, collaborative consumption, innovation, and a sharing economy, targeting today’s more conscious consumer. Expect to see any retailers and brands that offer resale, recycle or rental services to be highlighting these and scoring additional points with new customers during the peak season.
China’s leading eCommerce players are investing heavily in their logistics infrastructure. This is a country with four times as many people as the US, spread across some of the world’s most densely populated cities as well as remote rural areas.
Alibaba recently invested over $3 billion into its logistics affiliate Cainiao, with plans to deploy over 100 million smart devices into its fulfilment processes, from smart warehouses and delivery robots to machine learning in inventory management. Alibaba has also invested in 100,000 local pickup stations to aid last-mile delivery convenience for its customers. It also used more than 10,000 mobile lockers this year to allow customers to pick-up parcels without human contact.
JD, having led the way with delivery drones to remote rural locations last year, recently opened its first 5G-powered distribution center in Beijing. Improvements in connectivity are expected to facilitate breakthroughs in driverless forklifts and pre-empting distribution bottlenecks before they arise.
What we can learn?
Whilst most retailers don’t have the war chest or distribution capabilities to compete with Amazon’s free same- or next-day shipping, those who can’t cut fulfilment times might well find themselves cut adrift, particularly as we now rely so heavily on these services with the absence of in-store shopping.
Boohoo is an excellent example of a retailer to have seen the results of investment in fulfilment. What Boohoo has done so effectively is combine outstanding digital experiences with rapid speed-to-market and efficient operations. Boohoo continues to invest heavily in automation and global distribution logistics, so new items are appearing faster, consumers are buying, and receiving their goods quicker, and returns and refunds are processed quicker than ever.
Alibaba’s use of contactless pickup this year is also interesting, and something retailers should consider as a safe, convenient means of with last-mile fulfilment, particularly during peak times. Brands offering pickup — curbside, in-store, drive-through — are estimated to see a 90% increase in digital sales compared to the 2019 holiday season. Throughout the pandemic, 36% of U.S. consumers have used contactless delivery more than usual, and 30% used BOPIS more than usual.
The pandemic has accelerated the global the shift to digital in luxury at pace. It’s accelerated a generational pivot to new models of consumption, evolving channels, and changing consumer demands with a wholesale shift to online.
Alibaba Chief Marketing officer Chris Tung predicted a surge in purchases of luxury goods in particular during Singles Day, with global travel bans this year preventing Chinese consumers from shopping overseas. China accounted for 90% of luxury growth in 2019 and 35% of its total value, buoyed by the country’s growing number of younger, high-net worth individuals. These luxury buyers have become more international, have greater self-expression and are extremely digitally savvy.
What can we learn?
US and European retailers and brands have partnered with Chinese retailers to not only penetrate the Chinese market, but learn from their Chinese counterparts. Net-a-Porter and Farfetch have partnered with Alibaba and JD.com, respectively. These partnerships allow the giants to provide their vast marketing, payments and technology expertise and resources to the luxury market.
Burberry and Tencent are developing social retail in China. They’ve opened their first social retail store in the southern city of Shenzhen. All clothes are labelled with QR codes, showing product information on the customer’s phone when scanned. Customers can use WeChat to interact with the window display and play their own music in fitting rooms.
Author: Elliott Jacobs
Elliott is Director of Agency and Commerce Consulting at LiveArea EMEA. He is an experienced global commerce and multi-channel retail professional, specialising in helping B2C and B2B companies achieve measurable success by reviewing current strategies and processes, and identifying and capitalising upon emerging digital opportunities.