Chinese Singles Day – 2

By Stuart Durham



The Alibaba Singles Day phenomenon shows no sign of abating…

Singles Day is a day of celebration for people who are single in China. This holiday became extremely popular among young Chinese people and e-commerce giants such as Alibaba (who account for 65-70 per cent of China’s annual ecommerce of roughly $450bn-$500bn).

Having learnt from similar online sales days such as Cyber Monday in the US, Alibaba have taken full advantage of this holiday to create what is now the largest online shopping day in the world. Singles Day sales in Alibaba's sites topped US$5.8 billion in 2013 and US$9.3 billion in 2014 so we were all expecting new records to be set, but early figures indicate that the 2014 record has been shattered.

  • Within the first eight minutes, it had made sales of $1bn (almost $2.1m per second)

  • Within the first hour, it had made $3.9bn of sales ($65m per minute or almost $1.1m per second), which is almost double the amount spent in the same time period of the event last year

  • Within the first 90minutes, it had made sales of $5bn (almost $1m per second)

  • At the half way mark, sales surpassed the previous record of $9.3bn, representing sales of $775m per hour (almost $1.1m per minute)

Aside from the sheer value of sales, it is interesting to observe the change in digital channels that consumers have leverage with mobile seeing rapid growth. A promise by Taobao to offer consumer a “new surprise every hour” throughout the day has seen more than 130 million users visit its marketplace app, accounting for more than 27 million purchases in the first hour, far exceeding the peak from last year.

In the same way that every dark cloud has a silver lining, we should also be aware that every silver cloud has a dark lining… What does this sales bonanza mean for brand owners and consumers?

In January the State Administration for Industry & Commerce, a government regulatory agency, released a survey it had commissioned that revealed that only 37% of the goods it examined on Taobao were authentic, i.e. 6 out of every 10 products bought online in China are either bad quality or fake. A recent report by NetNames, Counting the Cost of Counterfeiting, indicates that this number is actually very conservative with 70% of the counterfeit goods seized worldwide coming from China.

Given that c.50% of Chinese online retail flows through Taobao, according to consulting firm iResearch, one can safely assume that a worrying percentage of today’s sales will result in consumers purchasing substandard or clear counterfeit products.

Aside from the direct impacts associated with the revenue losses and reputational tarnishing, brand owners should also expect an increase in consumer complaints and warranty returns.

Singles Day is further evidence that modern business cannot ignore this retail giant, even if they do not directly sell into the Chinese market. As well as proactively educating your customers on how to identify and avoid fakes, responsible brand owners should seek to exploit new anti-counterfeiting technologies and systems as part of a consumer & brand protection programme.