Single’s Day’s $30bn data – Gen-Z and attracting consumers through omnichannel marketing

By Declan Kearney, APAC MD and VP, Edge by Ascential

Single’s Day, the November 11th online discount sales phenomenon that began in China, this year for certain achieved the biggest sales ever in a single day anywhere in the world. During the 24-hour shopping bonanza (preceded by a 3-week pre-sales period), sales recorded through Alibaba’s ecommerce platform alone amounted to over US$30 billion, 27% up on last year – and that doesn’t take into account all of the other parallel promotions staged by online operators such as JD.com and bricks-and-mortar vendors both in China and increasingly in other parts of the world.

China’s economy may be slowing and the trade war with the U.S. is casting an ever-longer shadow, but the desire of China’s growing middle class to consume and improve the quality of their lives through product purchases of all kinds continues to expand. Particularly striking this year was the increasingly global nature of the Single’s Day consumer retail event, which far outpaces similar long-running sales blitz events such as Black Friday or Cyber Monday. Sales to Chinese consumers of a wide range of foreign products rose sharply, including luxury goods and travel packages and a range of imported goods. Research firm Oliver Wyman found in a recent survey that 57% of Chinese consumers expected to buy overseas goods during Single’s Day.

Understanding Gen-Z

The event has become of critical importance for brands targeting Chinese consumers – analysing the Single’s Day sales data has become essential for brands. The data clearly reveals the importance of Generation Z, young consumers born after 1990, and the consumption upgrade process in progress – the trend of Chinese middle-class consumers to aspire to better quality versions of products.

The top-selling mobile phone brand on the Alibaba platform on the day was also the most expensive – Apple’s iPhone. Dyson’s premium hair dryer ranked third in its category, and Alibaba reported that 33 brands had pre-sales in excess of RMB 100 million (US$14.4 million), including foreign cosmetics brands Estée Lauder, Lancôme, Olay, SK-II, L’Oréal, Snow Show, Elizabeth Arden and Shiseido.

Overshadowing this year’s event was the impending promulgation of China’s ecommerce law coming into effect on January 1st, 2019, that is expected to dramatically cut the bulk purchasing and importation of products by agents – in Chinese known as daigou or tuangou – which has been such a huge trend in recent years. The impact is already being seen in a sharp increase in direct online sales by luxury brands, as witnessed during the Single’s Day period.

Engaging the Consumer

Effectively targeting Gen-Z consumers means leveraging celebrities and Key Opinion Leaders (‘KOLs’), and using story-telling videos and innovative products to take the lead with brand buzz in the marketplace. The social influence of these ecommerce platforms is huge and participating actively and effectively in Single’s Day is now essential not only in terms of sales on the day, but also long-term brand-building across the whole year.

This year’s event highlighted the importance of brands taking an omnichannel approach to gain a strong competitive edge in the market – that is, considering the entire consumer journey, identifying all touch points and ensuring brand presence at all of them, both offline and online.

A great example of this is the fresh food operator Hema, a subsidiary of Alibaba, that has built a very successful business by engaging with consumers both online and offline, and offering a combination of purchasing options including in-store experiences that have increased the average spend of consumers. The sales data indicates that Hema consumers shopping both online and offline spend an average of RMB 575 monthly, compared to less than RMB 300 shopping only online or in-store.

Attracting customers leveraging data

Single’s Day is not all good news for brands – it requires them to offer discounts, cut margins and raise client acquisition costs. Uniqlo successfully re-directed online sales to its 500 bricks-and-mortar stores in China. The brand combined online and offline location data and purchase behaviour, consumer insights and category understanding to segment consumers and push relevant messages to different audiences to maximise foot traffic to its stores, according to media insights provider, WARC (also an Ascential company).

The result – Uniqlo was not only the first brand to cross the Single’s Day RMB100 million mark in less than one minute, but it was also able to siphon traffic from Alibaba’s platform to its own offline platform. Foot traffic to Uniqlo’s stores increased tenfold compared to Singles’ Day last year, and each offline Singles’ Day order had a 34% higher value compared to online orders.

About Edge by Ascential™

Formerly Brand View, Clavis Insight, One Click Retail and PlanetRetail RNG, Edge by Ascential™ delivers some of the industry’s most accurate and actionable sales-driving data, insights and advisory solutions for global brands and retailers looking to win in today’s ecommerce-driven world. Our solutions enable the world’s top brands and retailers to implement strategies that help maximize revenue growth; optimize product listings; increase sales faster than the category and the competition; and drive margin growth with pricing and promotions. Our weekly, daily and real-time data-driven insights (including online Sales and Share measurement, Digital Shelf performance, Price & Promotions monitoring and Retail Insights intelligence), coupled with a wide range of customized advisory and education services, give our clients a comprehensive and competitive advantage across the entire landscape online and around the globe.

For more information about how your company can gain the advantage, visit www.ascentialedge.com.