The Strategist

Singles Day showed changes in Chinese shopping habits

11/11/2016 - 13:39

Chinese consumers are expected to spend $ 20 billion on Singles Day, a day of online sales tremendously popular in China, according to The Guardian. Less than seven minutes after midnight on Friday, the Chinese e-commerce giant has sold goods worth 10 billion yuan ($ 1.47 billion).

Three years ago, Alibaba took six hours to get the same amount. Today, sales during less than a half-day have already brought more than entire Singles Day 2015 did, Alibaba said in a blog post.

Analysts expect sales to reach $ 20 billion, breaking the record of 2015 ($ 14.4 billion). Singles Day thus overshadowed "Black Friday" and "Cyber Monday" - the biggest two days of sales in the United States. Foreign brands such as Apple, Nike, New Balance, Adidas and Ugg, are top sellers.

"Protectionism will only hurt us, as Chinese consumers sweep American goods," - said Duncan Clark, founder of BDA consulting firm, author of "Alibaba: The House That Jack Ma Built."

Alibaba held the first online Singles Day in 2009. Back then, it was attended by only 27 trading companies. Over the years, the Day turned into the most massive sell-off in the world.

Singles Day (or Guanggun Jie) is annually celebrated in China on 11 November. In recent years, many Chinese shopping malls and online retailers have organized sales coincided with the holiday. The global sale involved more than 30,000 brands that sell more than 6 million kinds of goods.

According to Shenzhen Special Zone Daily, number of parcels delivered on 11-16 November will exceed one billion, which is 35% higher than a year earlier. China Post is going to involve 2.68 million people to deliver orders during this period, which is 50% more than in 2015. In addition, number of flights and vehicles for delivery for the time will be increased by 59%.

Foreign sellers, watching the shopping frenzy on November 11 in China, want to get their profits, too. Recently, the second largest UK supermarket Sainsbury's launched promo campaign of a shopping festival on November 11th. The seller was followed by Swedish brand of air purifiers Blueair, Spanish clothing brand Oysho, American Starwood and other foreign brands, which started to promote the festival on November 11th.

Buying foreign goods is an important part of the festival on 11 November. This year, a lot of cross-border e-commerce operators are trying to take advantage of profitable business opportunity, virtually equivalent to "Black Friday."

The online shopping flurry is a great opportunity to monitor consumption trends. Now, consumers’ preferences are shifting from luxury to essential goods, i.e. there is a kind of transition from "branded" to "quality" shopping. Such changes in preferences of Chinese customers are reflecting increasing consumption standards.

Online shopping in China is sky-rocketing. Volume of online retail sales in the country rose in January-July 2016 by 27.5% up to 2.6268 trillion yuan ($ 395 billion) yoy. This is stated in report of the State Statistics Administration of China.

Shopping online is becoming a habit of Chinese people, and it's starting to affect manufacturers.  It comes to such an extent that some companies began to sell their products exclusively through the Internet.

The report notes that share of online sales in total consumption of the Chinese population have reached 11.6%.