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Is Singles Day the next Prime Day for US brands?
Amazon Prime Day recently experienced its most successful year yet by reaching an estimated $7.16bn in sales as American shoppers clamoured to make the most of the deals. While $7bn in 48 hours was an impressive number for the company, imagine selling $1bn worth of goods in 90 seconds? This is exactly what China’s Singles Day achieved on November 11, 2018, cementing its status as the world’s biggest shopping event.
Singles Day, written numerically as 11/11, originated at Chinese universities as a celebration of singlehood, using the number "1" to represent singletons. But after being co-opted by Alibaba in 2009, Singles Day has morphed into an e-commerce juggernaut driven by the idea that single people want to treat themselves. And treat themselves they have; last year’s Singles Day raked in $30.8bn in 24 hours across Alibaba’s various e-commerce platforms. That’s triple what U.S. consumers spent online in 2017 for Black Friday and Cyber Monday combined.
Seemingly unsatisfied with merely dominating the Chinese shopping calendar, Alibaba has recently taken to branding Singles Day as a “Global Shopping Festival.” While it has yet to truly reach global status, the sales “holiday” has been gaining traction in the US with an increasing number of retailers (including big names like L'Oréal, Michael Kors and Nike) offering their own Singles Day deals.
But with Prime Day, Black Friday and Cyber Monday firmly established as shopping holidays in the US, is there room for a fourth? Mammoth sales, global growth and an estimated five million Chinese-Americans to consider may suggest the answer is yes. But there are a host of factors that retailers and brand marketers ought to consider before attempting their own Singles Day sales events.
Here are four pros and four cons for companies to consider when deciding how they might tap into the major Chinese shopping holiday, whether it’s for the Chinese-American market or US consumers in general.
The Four Pros
- Novelty: The continued relevance of “treat yourself” as a shopping concept could work in Single Day’s favor for two reasons. First, it’s an idea that resonates with younger shoppers who haven’t yet started families of their own. Second, this “treat yourself” event lands on the cusp of the Black Friday/Cyber Monday season when consumers are typically shopping for other people.
- Global growth: Singles Day sales are growing outside of China. In 2018, U.S. shoppers spent $1.82bn on Singles Day, according to Adobe data, up 29.1% from the previous year.
- US brands sell globally: The popularity of Singles Day isn’t limited to US consumers; US brands were among the most popular international brands bought on Singles Day. More than 40% of consumers bought from international brands, which was led by brands from Japan and the US That success may be replicated closer to home.
- Tried and tested: Tying sales to a particular holiday is a proven method for creating a sense of urgency that incentivizes shoppers to spend money when they otherwise wouldn’t.
The Four Cons
- Crowded shopping landscape: Are American shoppers really looking for another shopping holiday in November? It’s debatable. Part of Prime Day’s success is due to the fact it’s in July when the previous year’s holiday season excitement has faded in the rearview mirror. Fighting for attention when Black Friday/Cyber Monday buzz is building up might prove to be a losing battle.
- Cultural dissonance: Singles Day has roots in Chinese views related to gender and marriage, which may get lost in translation with American audiences. Combined with the proximity to the traditional holiday shopping season may create confusion among US shoppers.
- Offline boost: Alibaba combines online shopping discounts with offline entertainment to give it’s Singles Day sales a boost. Nicole Kidman, Pharrell Williams and Lionel Messi are some of the A-list celebrities who’ve recently been recruited to drive excitement and sales at these offline events. And last year, supermodel Miranda Kerr and Mariah Carey joined the festivities at a countdown to midnight event at Shanghai’s 18,000-seat Mercedes-Benz Arena. Currently, there simply is no US equivalent to these star-studded sales events.
- Entrenched shopping habits: Most of Singles Day’s sales take place via mobile devices, another area where Chinese shoppers far outdo their US counterparts. My team at Criteo pulled data from 2018, showing that the mobile share of sales in Hong Kong reached a high of 43% on Singles Day. Hardly surprising given the country’s growing middle-class that increasingly uses smartphones. Considering these differences in shopping habits, it doesn’t follow that Singles Day’s homeland success will be repeated to the same extreme in Western countries.
It should come as no surprise that US retailers are diving into the Singles Day waters given the mind-boggling sales numbers around the event. And with Alibaba and other participating Chinese e-commerce giants like JD.com throwing their weight behind international expansion, it may feel unambitious to just sit on the sidelines. Last year, Singles Day claimed to have sold merchandise from more than 60,000 international brands to customers in almost every country. But retailers and brand marketers should consider both sides if they elect to participate. Cultural differences, not to mention the ongoing and unpredictable Sino-American trade war, may mean that Singles Day will struggle to gain a foothold in the busy November domestic shopping season.
And yet, I advocate for the former. Everyone deserves a chance to treat yourself.
Jaysen Gillespie, global VP, head of analytics, insights and data science at Criteo.
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