Five Big Singles Day Lessons

In the 1990s, Chinese college students began a “Chinese Valentine’s Day” on November 11 for single men and women. They picked this date because of the repetition of the number “one” (as in “single”), and because the figure 11/11 is reminiscent of “bare branches” (the Chinese expression for unmarried people). In 2009 Alibaba began to use the date November 11 and the term “Singles Day” to represent a day of great C2C promotions. In fact, although Alibaba controls the name Singles Day, its latest preferred name for the sales promotion on November 11 is “The Alibaba Group 11.11 Shopping Festival," which boasted both C2C (Taobao.com) and B2C (Tmall.com and AliExpress.com) promotions this year. This issue of Executive’s Edge is not necessarily about Alibaba or Singles Day, but rather about the lessons that all retailers and consumer products companies can learn from Singles Day. Let’s take a look: Total Sales Volume (Holy Cow!): The sales volume done through Alibaba on Singles Day was beyond all of our estimates. Many experts predicted between $6.5 to $7 billion, and my prediction was above $8 billion. The final number for completed sales is $9.3 billion on 11/11/14 for Alibaba. To help wrap your head around this, consider these facts: 80% of all China shoppers who shop online placed at least one order and 278 million total orders were placed. $9.3 billion is a 62% increase over the record sales of 11/11/13. Singles Day was four times larger than the U.S. Cyber Monday and 2.5 times larger than 2013 Black Friday plus Cyber Monday. More than 600 journalists attended the event at Alibaba headquarters in Hangzhou. Alibaba doubled the number of network servers the company operates outside of China to handle volume for the cross-border traffic. Xiaomi sold 720,000 phones in the first 12 hours of Singles Day. There were over 1.2 million large home appliances sold, more than 3 million lighting products, 200,000 bottles of laundry detergent, and 50,000 new cars. “Prime the Pump”: Successful promotions begin before they begin, and stimulating customers to buy occurs before a sale begins. As the popularity of Singles Day grows, so too does the awareness that on November 11 there will be great deals offered by Alibaba. The information about the great deals begins to flow weeks before November 11. This is so effective that in the first 18 minutes of November 11, $1 billion of gross merchandise volume took place and was settled through payments on Alipay. The second $1 billion was completed in 1 hour and 12 seconds. How this is possible? How could this volume of transaction take place in the middle of the night? The answer is that Alibaba “primed the pump”—up to four weeks before November 11, shoppers who put a small down payment can process their order to be placed just as the calendar goes from November 10 to November 11 Shanghai time. It is a Small World After All: For the first time ever, Alibaba expanded Alibaba outside of China. Singles Day was technically available to 220 countries, with 217 countries actually placing orders. Of course China was still the lion’s share of volume, but think about these Singles Day facts: Russia was the leader for AliExpress, with 70+ of all items offering free shipping. Russia was the leader for AliExpress, with 70+ items offering free shipping. U.S. customers on AliExpress receive their order in 3 to 5 days after placing it. Customers in Hong Kong, Singapore, Malaysia, and Taiwan received discounted cross-border shipping rates. Alibaba had agreements with the U.S., France, and South Korea to increase product offerings. U.S. brands that participated include Costco, American Eagle Outfitters, Calvin Klein, Kenneth Cole, Juicy Couture, Uniqlo, Old Navy, Blue Nile, and more. Sellers from 20 countries other than China were involved. On November 12, Jack Ma stated that “11/11/14 was just the beginning of Alibaba’s international expansion.” Your Package has Arrived: Alibaba began managing delivery expectations before November 11 and continued to manage expectations a week after November 11. Every major parcel delivery service in the world participated in the delivery of more than 500 million packages. The major delivery agents included China Post, Russia Post, Brazilian Post, Spanish Post, Singapore Post, Australian Post, DHL, FedEx, UPS, and TNT. The China Post estimated the volume of packages to deliver was 15% more than the 500 million it had anticipated. Grab Your Smartphone:  More than 43% of all Singles Day orders were placed via a mobile device. In 2013 the percentage of orders completed via mobile devices was 21%. It’s also interesting that 11Main.com just released its mobile site last week. Singles Day 2014 is much more than just a busy sales day for Alibaba. I see Singles Day as a forecast of future events and an opportunity for huge lessons for us all. I hope this issue encourages you to take action to get ready for the future.