Why millions of Chinese will be frantically shopping on November 11th

(From The Economist)

AT ONE second after midnight, when the calendar flips to November 11th, millions of Chinese shoppers will start clicking themselves into a frenzy of consumer excess. Through their smartphones, computers and tablets, they will take advantage of steep discounts and other incentives offered by China’s biggest online retailers, who have been busily laying the groundwork with advertising campaigns and assiduous logistical preparations. By the time midnight rolls round the following day, shoppers will have spent billions of yuan, and many of the hundreds of millions of packages that they ordered online will have been delivered to their doors. How did a frivolous and informal Chinese holiday evolve into the world’s biggest single-day retail event?

Singles Day ad

Singles Day ad

November 11th is “Singles’ Day” in China, a holiday that now occasions these massive movements of merchandise. Since the 1990s it has been observed casually and playfully by unmarried Chinese to celebrate—or perhaps bemoan—their single status. The date was chosen because of the four ones it contains (11/11). Initially, a bit of gift-giving was part of the fun, but it had more to do with socialising and eating symbolic foods like long sticks of fried dough that resemble the number one. It is also called “Bare Branch Day”, after the sadly evocative Chinese slang term for a single man. Today it is commonly referred to as “Double Eleven”.

Singles Day parcel processing in 2014

Singles Day parcel processing in 2014

It is the Alibaba Group—China’s biggest online retailer, and the biggest beneficiary of the phenomenon—that claims the credit for transforming Single’s Day into a shopping orgy. In 2009, one of its executives was trawling the calendar for an autumn date to serve as the foundation for a Chinese shopping day that could rival America’s Black Friday—the day after Thanksgiving that marks the beginning of the Christmas shopping season. The goal was to use discounts and other one-off promotions to lure China’s already-avid consumer class into online retail. The promotion was an immediate success and has grown since: shoppers spent more than 57 billion yuan ($9.3 billion) via Alibaba alone last year. That dwarfs the $1.5 billion spent by Americans online during last year’s Black Friday.

Sales this year should be even higher. Nielsen, a consultancy, forecasts that average spending will increase by 22% to 1,760 yuan per shopper. Cainiao Logistics, Alibaba’s delivery-services affiliate, handled 278m orders on Singles’ Day last year (30m is a normal figure). This year Cainiao is expecting to use 1.7m delivery staff, 400,000 vehicles and 200 aeroplanes to handle the expected crush. But not all the numbers herald good news for Alibaba. Neilsen reckons that 87% of shoppers will be shifting their purchases to take advantage of the discounts available on Singles’ Day.

Singles Day promotion in China

Singles Day promotion in China

 



Categories: Asia Unhedged, China

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