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How online retailers can profit from Singles’ Day and the global shopping festival

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3 minute read

Singles’ Day (11.11) began on Chinese university campuses in the mid-1990s as a counterpoint to Valentine’s Day for couples. Now 11.11, four 1s as the date is written, is a $30 billion global shopping event, bigger than last year’s record-breaking $7.9 billion Cyber Monday online shopping day in the US.

Source: https://www.getelastic.com/wp-content/uploads/ppro_singlesday.pdf

Popularized in 2009 by an executive named Daniel Zhang who used the date to promote Tmall, Alibaba’s virtual mall for brands, with just 27 merchants participating. Singles’ Day was aimed to publicize online shopping and encourage sales in the quiet period between Golden Week in China and Christmas. It’s certainly delivered on those objectives and continues to grow each year. 

Consumers spent $1 billion on Alibaba platforms in the first 1 minute and 25 seconds of last year’s event and racked up $30.8 billion in spending by the event’s close, an increase of 27% in 2017.[1] That is more than the Annual GDP of Uganda or Estonia. This makes 11.11 the world’s biggest retail event, three times larger than Cyber Monday 2018, which at $7.9 billion was a new US record for online sales in a single day.[2]

Single’s Day is becoming increasingly popular outside China. Customers from around the world can shop on Alibaba Group websites and retailers worldwide are jumping on the 11.11 bandwagon by offering promotions on their own websites to coincide with the event.

In fact, retailers such as Adidas, Apple, Dyson, Estée Lauder, Gap, Kindle, L’Oréal, Nestlé and Nike were among the 237 brands that exceeded RMB 100 million ($14.4 million) in sales during the 2018 event.[3]

How retailers can increase Singles Day conversions 

As 11.11 becomes more global, payment is going the other way. It’s becoming more local, especially across APAC and beginning to in Europe. This stands to reason that there is no single global way to pay. 

A lot of these were bank transfer payment methods, which account for around half of all online payments in Austria, Germany and Poland, up to 70% in the Netherlands[4], but also very popular in Malaysia, Indonesia and Thailand.

With only 40% of online payments in Europe and less in APAC, made with a plastic card,[5] retailers must accept that they will miss out on sales unless they can localize payments. 

Retailers need to be acutely aware of how their customers, and potential customers, prefer to pay and make sure that all of them are in good working order in the run-up to 11.11. 

Localization is the answer to increased conversions. Retailers must be aware of how various regions prefer to pay and offer that corresponding method to those consumers. In many parts of Asia, this means looking to mobile payments as opposed to traditional card-based payments here in the U.S.

Catch-22

The dilemma for retailers is that customizing and simplifying payment choices for customers often creates complexity behind the scenes. This is usually in back-end systems and the processes needed to collect, reconcile and refund multiple payment types.

The solution to the dilemma is simple; outsourcing back-end payment operations allows retailers to focus on the front-end engagement with customers, where they can add value and create a competitive advantage. This means developing smart partnerships for local payment expertise.


[1] ‘Alibaba Group generated RMB 213.5 billion (US$30.8 billion) of GMV during the 2018 11.11 global shopping festival’, Alibaba Group press release, 12 November 2018, https://www.alibabagroup.com/en/news/article?news=p181112
[2] ‘Adobe Analytics data shows that Cyber Monday broke online sales record with $7.9 billion’, Adobe press release, 26 November 2018, https://www.businesswire.com/news/home/20181126005829/en/Adobe-Analytics-Data-Shows-Cyber-Monday-Broke
[3] ‘Alibaba Group generated RMB 213.5 billion (US$30.8 billion) of GMV during the 2018 11.11 global shopping festival’, Alibaba Group press release, 12 November 2018, https://www.alibabagroup.com/en/news/article?news=p181112
[4] PPRO Payment Almanac, Western & Central Europe, individual country profiles, www.ppro.com/almanac
[5] PPRO Payment Almanac, Western & Central Europe, www.ppro.com/almanac

Tristan Chiappini
Tristan Chiappinihttps://www.ppro.com
Tristan is the Vice President, Partnerships at PPRO and an industry expert for Alternative Payment Methods globally.
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