Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Single’s Day (11/11) used to be the heyday for China’s consumerism, but this year the consumers went for the cheap stuff, says business analyst Shaun Rein at CNBC. Low consumer confidence forced the e-commerce platforms for the whole year to discount products, but Single’s Day was the cheapest event ever for consumers. Alibaba is losing its shine to newer platforms, he adds.
China was the first economy to leapfrog into mobile, skipping hardware technologies from the West. Now it is moving from “mobile first” into “data first”, paving the digital road also for other economies, writes investment analyst Winston Wenyan Main Arabian Business.
Winston Wenyan Ma:
Across just about every industry sector, Chinese companies are rushing to learn how new digital technologies, including the internet of things, AI, blockchain, cloud computing and data analytics can be integrated into their businesses to unlock value from non-traditional angles. The transformation of businesses and industries has been more profound than from the mere addition of internet.
Again, taking the logistics issue Singles Day for example. The inventory, distribution and delivery of numerous orders in a short span of time is such a challenge.
And as such, Alibaba’s logistics affiliate, Cainiao, launched big data analytics to empower merchants with demand forecast data and allow them to accurately pre-stock their goods in the right quantity and location.
Moreover, Cainiao used GIS (Geographic Information System) to determine the fastest and most cost-effective delivery routes in a variety of complex road networks, including both rural villages and crowded urban areas. Because of the 2020 coronavirus pandemic, Cainiao deployed more than 10,000 mobile lockers to allow customers to pick-up parcels without human contact.
All these have profound implications for emerging markets that are looking at China as a reference case when they work on their own digital transformation. That means they need to look beyond mobile phones and the digital wallet; instead, they must start positioning themselves for the next phase – AI and the digital economy – now.
The billion-user messaging service of WeChat, $74 billion e-commerce in 24 hours on Singles Day, and “smile-to-pay” functions creating a cashless society are already screenshots from yesterday.
China’s Single’s Day continued to be a runaway success after COVID-19, although e-commerce expert Ashley Dudarenok finds it hard to compare it with the previous events because it changed from a one-day event to an 11-days success. But more luxury brands, cars, and even McDonald’s joined the fray, and gamification become important, she tells at state-owned broadcaster CGTN.
China's Single's Day broke several records, but that is deceptive. Consumers waited for bargains and delayed purchases till Single's Day, says retail analyst Ben Cavenderto Reuters.
Reuters:
“What’s happened is that you’ve had a lot of consumers this year being a little bit more careful about their purchasing because the economy’s slowing down,” said Ben Cavender, managing director of consultancy China Market Research Group.
“I think this year especially, people were kind of waiting for Singles’ Day and kind of waiting to make some of those medium-sized purchases that they didn’t want to pay full price for.”
In selling commodities, China's 11.11 Single's Day and the American Black Friday have much in common, says business analyst Andy Mok. But China's shopping festival has developed much deeper than just a selling opportunity for retailers, he argues at the CGTN.
Andy Mok:
This year's event in China has been rechristened as the 11.11 Global Shopping Festival. While superficially it appears similar to Black Friday, underneath the hood it is quite different and the implications for the future of retail are profound.
The goal of Black Friday is quite simple: move merchandise so American retailers can book more sales. However, while 11.11 started with the same goal it has since evolved to achieve much more sophisticated objectives. According to Daniel Zhang, Alibaba CEO, the company's goal is not to dominate e-commerce but achieve the complete digitization of retail, both online and offline, which it dubs “New Retail.”
Rather than just boost sales by offering extreme deals, brands participating in 11.11 now see it as a way to acquire new customers and strengthen customer engagement. One way brands do this is by promoting limited edition products instead of big discounts with 180,000 brands from inside and outside China participating.
As part of its New Retail vision Alibaba has launched a business like Hema, an integrated retail experience combining a brick and mortar supermarket, restaurant and distribution center that delivers within a three-kilometer radius, and an automobile vending machine concept that allows prospective buyers to try out new cars before ever interacting with a salesperson.
According to Zhang, 11.11 has now become an important platform for showcasing these emerging capabilities for new retail. Also, this edition of 11.11 includes 200,000 mom-and-pop stores powered by Alibaba's Ling Shou Tong to provide online sales promotions and augmented reality-based red packets that offer discounts at 3,000 “Tmall Corner Stores.” Furthermore, through Lazada, its Southeast Asian affiliate, Alibaba hosted its 11.11 Shopping Festival across Singapore, Malaysia, Thailand, Indonesia, the Philippines, and Vietnam.
As the above examples show, 11.11 has evolved to be much more than just a shopping day and is now a key component of how a Chinese company is leading the way in creating the future of global retail. Perhaps before too long, we will see Amazon and others adopting similar approaches to keep pace and Black Friday and Cyber Monday may start exhibiting Chinese characteristics.
Internet giant Alibaba might have sold for close to 31 billion US dollar at China's Single's Day, but author Zhang Lijia notices also growing concern on the massive shopping festival, she tells Upm Pulp. Consumerism and environmental concerns emerge with the growing turnover.
Upm Pulp:
The Singles’ Day shopping bonanza means also over one billion packages flying across the globe. Millions of packages add up to tonnes of cardboard, plastic, tape and bubble wrap. Along with impressive sales figures, Singles’ Day has also become to signify a huge amount of waste.
Last year Singles’ Day sales resulted in an estimated 300 000 tonnes of unrecycled packaging waste in China. Recently many have started to voice concern over the impact of the one-day shopping spree on the environment. One of those uneasy about the blatant commercialism is the author and journalist Lijia Zhang.
“Online shopping has really caught on in China in a big way,” Zhang says. “The Chinese Government has realized the problems for the environment and has set a body to oversee the environmental impact of logistics companies. But many ordinary people don’t know or care about the disastrous result this shopping festival has on the environment.”
This year, more merchants affiliated with Alibaba and consumers outside China are expected to join in the festivities. Southeast Asian e-commerce subsidiary Lazada Group will hold for the first time Singles’ Day promotions across Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam, according to Alibaba.
Marketplaces like Zalora, Shopee and Expedia are offering consumers in markets like Singapore discounts if they shop on the platforms during the Singles’ Day period.
However, recent China-US trade tensions and a weak stock market have battered consumer confidence, according to Shaun Rein, managing director of China Market Research Group.
“Sales from Double 11 are still going to grow, but not as much as before,” Rein said, adding that many brands are likely to have to offer deeper discounts this year to encourage consumer spending.
But Rein acknowledged that Singles’ Day has changed global strategies for retail brands.
“10 years ago, Singles’ Day was still a minor event, and brands were focused on promotions for the Lunar New Year,” he said.
“Now Singles’ Day is a bonanza – it’s Christmas Day, Boxing Day and Black Friday all wrapped into one. It’s not just for singles any more, it’s for everyone, offering everything from cheap items to big-ticket purchases.”
11.11 is Alibaba's Single's Day, an annual online shopping festival and marketing expert Ashley Dudarenok explains where it is coming from. Last year Alibaba had a turnover of US$25 billion, while competitor JD claimed US$19 billion for the 11-day festival. Ashey on the power of data.
Alibaba had another spectacular singles day, reporting US$25.3 billion of gross merchandise volume settled through Alipay. Business Insider reports that this nearly doubled the $12.8 billion that US retailers sold between Thanksgiving and Cyber Monday last year.
"More than US$25 billion of GMV in one day is not just a sales figure," said Daniel Zhang, Chief Executive Officer of Alibaba Group. "It represents the aspiration for quality consumption of the Chinese consumer, and it reflects how merchants and consumers alike have now fully embraced the integration of online and offline retail."
Actually, Zhang is wrong. GMV is not at all a sales figure (although it may well represent the aspirations of the Chinese consumer). Alibaba does not report GMV as revenue (or sales), Instead Alibaba reports the transaction fees it charges to sellers. In its fiscal year 2017, Alibaba reported 114 billion RMB of revenue on GMV of 3.8 trillion RMB.
Analysts love GMV, which they believe gives a more meaningful view as to the volume of business going through the platform. A major problem is that GMV is not a defined accounting term, and the numbers are unaudited.
Behind the quarrel is an all-out war to conquer the world’s largest and fastest-growing e-commerce market, industry analysts say. According toiResearch, a Chinese internet consulting firm, Tmall accounted for 56.6 percent of all business-to-consumer e-commerce sales in 2016, while JD.com came in second with 24.7 percent of all sales.
“Both companies are manipulating the numbers to make themselves look good — for reporters and brands, and to get consumers excited,” said Shaun Rein, author of the upcoming book “The War for China’s Wallet” and founder of China Market Research Group, a strategic market intelligence firm in Shanghai. Winning the annual shopping festival “is really like a trophy,” he told Sixth Tone.
China single's day (28 August) triggered off a range of commercial activities. Business analyst Shaun Rein looks on AFP at the industries focusing on this attractive target group. Women play a key role in consumer spending, he says.
AFP:
A range of businesses are targeting singles, including travel, dining, online video games, online video streaming, sports apparels and cosmetics, according to Shaun Rein, founder of China Market Research Group and author of the book The War for China's Wallet...
The high-earning urban female population is a major economic player.
Online flower retailer Reflower says almost 80 per cent of weekly orders come from female customers, with more than half buying flowers to "comfort themselves".
"Females who are single especially spend most of their paycheck. Males tend to save more because they want to buy a house later on," Rein told AFP.
"It's really being empowered by women, because they are the most optimistic consumers, they tend to have higher paying jobs than men, and they tend to spend more."...
"In urban areas especially, parents are saying to their girls 'don't settle'. Only marry if you want to marry, only have kids if you want to have kids," Rein said, adding that the phenomenon is signalling social progress.
"I view that as showing female empowerment... I think it's a very healthy shift, showing more male-female gender equality than ever before."
Single's Day in China, on 11 November, has become a major discounting e-commerce event, passing even America's Cyber Monday in size. Retail analyst Shaun Rein explains why the Single's Day makes Chinese youth happy at CNBC.
CNBC:
"Singles Day has become a hugely important day for retailers. The discounting today has been the talk of consumers, from millennials to 40-year-olds. Aside from Chinese New Year, this is becoming one of the key days for retails to launch promotions," Shaun Rein, Shanghai-based managing director of China Market Research Group, told CNBC.
"Above and beyond singles, everyone knows that it is a day of great deals. Chinese youth are getting more frustrated because of rising real estate costs so they are shifting to purchases that make themselves happy," he added.
Chinese are more excited about e-commerce as they can buy products that are not sold in brick and mortar stores near their homes, said Rein. The profile of an average online shopper is a young, middle-class consumer living in a tier-two or tier-three city, who often lack a wide variety of retail choices.
Is president Xi Jinping going to win the fight against corruption, the +China Weekly Hangout asked on October 31? +Chao Pan, +Steve Barru and +Harm Kiezebrink discussed how the drive against corruption and political survival mix with each other.
Single’s Day (11/11) used to be the heyday for China’s consumerism, but this year the consumers went for the cheap stuff, says business analyst Shaun Rein at CNBC. Low consumer confidence forced the e-commerce platforms for the whole year to discount products, but Single’s Day was the cheapest event ever for consumers. Alibaba is losing its shine to newer platforms, he adds.
