Singles Day is over until next year, but we’re still unpacking the implications for cross-border e-commerce merchants. Once an obscure “anti-Valentine’s” holiday celebrated by single people in China on November 11, the day has now spread beyond Chinese borders and is nothing short of an international e-commerce phenomenon. This year’s Singles Day broke records, with early reports of Alibaba raking in $38 billion in sales compared to last year’s $30.5 billion.
What can international e-commerce merchants learn from the success of Singles Day 2019 as they head into the ever-important holiday shopping season? Here are five takeaways that can help cross border e-commerce companies refine their strategies for selling into China and the Asia-Pacific market at large this holiday season and beyond into 2020.
- Live streaming can boost international e-commerce sales. This year, the highly-anticipated day of online shopping started early on November 10th with a live-streamed performance from pop superstar Taylor Swift on Youku, a live streaming website owned by Alibaba. Approximately half a billion consumers watched the exclusive performance and were immediately sent to Alibaba’s e-commerce site as soon as it was over. While most e-commerce merchants can’t afford to broadcast a live concert by one of the biggest stars in the world, Chinese retailers are looking more closely at streaming video on their e-commerce sites as a way to capture consumers’ attention and increase impulse sales.
- Early deals moved the most inventory. Online retailers who are preparing for Black Friday and Cyber Monday should take note of when Singles Day made its most revenue. Within the first nine hours of Singles Day 2019, Alibaba raked in $23 billion in sales – more than half of the day’s total revenue. Alibaba accomplished this with an international marketing blitz touting the participating brands and top deals, so consumers were poised and ready to strike as soon as the Singles Day marketplace opened.
- Chinese consumers still want U.S. goods. Trade war? Not so fast. Speculation leading up to Singles Day focused on the escalating tariffs between the two nations, but ultimately, the holiday proved that if the deals are tempting enough, Chinese consumers still want to get their hands on U.S. brands. For example, Apple offered its latest iPhone on Alibaba marketplace Tmall and sold more devices within the first ten minutes than they did for the entirety of Singles Day 2018. In fact, Alibaba reported that U.S. retailers were the second-largest source of goods for Singles Day this year, coming in close behind Japan.
- A global logistics strategy can make or break a retailer. Perhaps the larger story beyond the $38 billion in sales is the day after Singles Day. That’s when retailers must fulfill all of these orders. In preparation for the deluge, Alibaba had staff working around the clock, aided by robots, packing somewhere in the neighborhood of 2.8 million packages. But it doesn’t stop there. These parcels must now be transported through Alibaba’s logistics system and delivered via a last-mile carrier. And they must be delivered within the time frame promised when the customers made their purchases. That’s why Alibaba has spent years building out its international shipping strategy, including investment in and acquiring logistics startups to help them streamline operations. Without that, there’s no way Alibaba could make Singles Day a success.
- Alternative payments boosted sales. In addition to Alibaba, Tmall, and the hundreds of other participating brands, Singles Day was also a big win for alternative payment providers. The Alibaba-backed Alipay app processed billions of dollars in payments, and Tencent Holdings’ payment app WeChat also got a workout. For domestic retailers who are considering expansion into China and other APAC markets, it’s important to note that Chinese consumers have very specific payment preferences, with Alipay and WeChat being the top, but not the only ones.
The biggest lesson Singles Day 2019 can teach brands and retailers is the undeniable buying power of China. It’s not an easy market to enter, but with the right amount of research and planning, it’s well worth the up-front work. To succeed as a cross border e-commerce merchant in this massive market, brands and retailers must have solid, tested strategies to address some of the biggest hurdles, such as currency display, product catalog restrictions, relevant taxes and duties, and proper customs documentation. It’s true that Chinese consumers are eager to buy goods from other countries, and brands who make it easy for Chinese consumers to find what they want and check out with ease can reap considerable benefits from this market.