Credit: Shutterstock photoIn 1993, as legend has it, a group of students at Nanjing University in China decided to celebrate “Bachelors’ Day,” in honor of their single status. The students called it “Guanggun jie,” which also translates as “bare branches day.” They chose to mark the occasion on November 11 because of the obvious numeric symbolism of 11/11. The idea soon spread across Chinese society, although the name was changed to “Singles’ Day” to encourage unmarried females to join the festivities (which now include Blind Date parties).
As time passed, Chinese e-commerce giant Alibaba (BABA) saw that Singles’ Day provided an ideal opportunity to capture the hearts, minds, and wallets of China’s growing middle class. Alibaba had already built two robust e-commerce outlets, Tmall and Taobao (China’s versions of Amazon (AMZN) and eBay (EBAY), respectively). China’s market economy had become increasingly liberalized, and its citizens, particularly affluent younger ones, had wholeheartedly embraced consumerism. Young adults in China are under intense cultural pressure to marry, an issue exacerbated by a severe gender imbalance — it’s estimated that men will outnumber women in China by 30 million in 2020. In 2009, Alibaba therefore decided to turn Singles’ Day into an online shopping holiday, marketing it, in part, as a form of “retail therapy” for lonely hearts and encouraging people to spoil themselves.
The response was tepid to start — the initial Singles’ Day took in just $7 million in sales — but it soon took off. In 2012, total sales eclipsed that year’s U.S. Cyber Monday revenue for the first time; in every year since then, Singles’ Day sales have more than doubled Cyber Monday figures. In 2013, Alibaba generated $5.8 billion in sales on Singles’ Day, a 5,740 % increase from 2009 results. Last year, it topped the total e-commerce sales made in the U.S. from Thanksgiving through Cyber Monday in 2013, bringing in $9.3 billion overall and $2 billion in the first hour alone.
In light of that growth, it’s not surprising that thousands of merchants, including U.S. retailers such as American Eagle Outfitters (AEO), Blue Nile (NILE), Calvin Klein, Costco (COST), Juicy Couture, and Tesla Motors (TSLA), have joined the party. This year, over 40,000 stores and 5,000-plus brands from 25 countries are expected to use Alibaba’s network to market more than 6 million products to more than 300 million middle-class shoppers in China.
Alibaba’s long-term plan for the holiday, though, is focused outward: It seeks to export Singles’ Day to other countries. In the wake of last year’s success, CEO Jack Ma told CNBC that he hoped it would become “a global shopping day for the U.S., Europe, anywhere in the world” within the next five years. The company is already making inroads into the U.S. market. Its initial public offering in September 2014 took in $21.8 billion from Wall Street investors and raised another $3.2 billion when its underwriters exercised an overallotment option; the $25 billion total was the largest IPO in history.
Entering the U.S. retail market is one thing; exporting a brand-new shopping holiday to the market is another challenge entirely. Alibaba’s goal of turning November 11 into Singles’ Day in the U.S. could face a variety of headwinds, at least initially:
- The U.S. celebrates Veterans Day on November 11. That date was chosen specifically for its numeric and historical significance. A lot of retailers currently offer Veterans Day sales, which typically highlight discounts for military families.
- Quite a few traditional and/or shopping holidays in the fall and early winter already exist. There are sales involving back-to-school purchases; Labor Day; Halloween; and the entire holiday season — Thanksgiving, Black Friday, Small Business Saturday, Cyber Monday, Cyber Week, Green Monday, Free Shipping Day, and a range of special deals from individual stores. Trying to work another sales event into that line-up may not be as easy for retailers or consumers as Alibaba might hope.
- Singles’ Day has yet to establish a presence here.Lack of consumer awareness of the holiday isn’t the only issue. Singles’ Day in China promotes the idea of people buying gifts for themselves; the focus of U.S. holiday shoppers tends to be on finding gifts for others. The name might also deter some of the 119 million or so married consumers in this country. Alibaba addressed that in China by trademarking “Double 11” and “11-11” and using them to market the holiday, but U.S. shoppers aren’t acquainted with those names, either.
Over time, some of these obstacles will recede on their own. Last year’s Singles’ Day sales figures earned widespread attention in the media, for example, putting this year’s event, and likely all future ones, on the radar, and some U.S. retailers are already marketing Singles’ Day sales. Last year, Dealmoon.com, a Chinese-American e-commerce firm, began holding Singles’ Day promotions last year, creating a dedicated page that displayed over 100 deals with participating brands and stores. This year, in addition to Dealmoon.com, several other stores are advertising Singles’ Day promotions on publisher and affiliate sites. American consumers will consequently become increasingly familiar with the holiday.
In the meantime, savvy retailers of luxury products and other items that market to singles could actually benefit from the slow adoption of this promotion in this country. It gives them an opportunity to get in on the ground floor of a new holiday — early in the season, before holiday shopping budgets have been drained — while filling a niche that’s previously been underserved. There’s long been a dearth of U.S. sales events that specifically target single people.
After all, there are nearly 125 million unmarried people in the United States — in fact, they make up a majority of our adult population. Not all of them will necessarily be receptive to a shopping day in their honor, but if just one-third of that market responds, the overall sales totals would be significant. Singles’ Day is intended to give these unattached adults a reason to celebrate and indulge their personal interests and even drive up their average order values. This offers retailers and luxury brands that cater to singles, either primarily or as a significant portion of their audience, an opportunity to introduce themselves to a wider audience (particularly among the Chinese-American population) and build stronger ties with their customer bases. Besides, budget-conscious shoppers respond to savings deals regardless of their relationship status; a 2014 survey in China found that 62% of people who planned to shop on Singles’ Day were married, and another 12% had partners.
Introducing a new shopping holiday can be risky, but it’s hardly unprecedented. Just this past July, Amazon invented “Prime Day,” and the company reportedly sold more products on that artificial holiday than it did on Black Friday 2014. Prime Vice President Greg Greeley also said the day set a record for Amazon Prime subscriptions, with “hundreds of thousands” of new member joins. A variety of other retail outlets, including Walmart (WMT), Levi’s, Newegg, and FreeShipping.com, offered dueling sales on Prime Day to make the most of the increased consumer activity, and all of them likely saw strong year-over-year sales growth. Amazon says it will run the promotion again next year, and its rivals will no doubt do the same. Indeed, after witnessing the increased activity among online shoppers on Prime Day, many retailers that didn’t offer sales will likely do so in 2016. In today’s competitive retail environment, testing a sale like Singles’ Day could help stores — particularly early adopters — stand out from the crowd.
Most importantly, Singles’ Day offers retailers another opportunity to maximize their holiday revenues. Every retailer wants to get customers to start shopping with them as early in the season as possible, and a November 11 sale could invigorate those efforts. Plus, tens of millions of people are eager to buy gifts; a recent survey found that 26% of consumers have already started to do so, and another 58% plan to start before Black Friday.
Singles’ Day is still a relatively unknown phenomenon in this country, and there are no guarantees that it will take off, at least in the same way that it did in China. It is, however, a trend to keep an eye on. If enough U.S. consumers respond positively to Singles’ Day sales offer this year, retailers will have a full Leap Year to determine their own deals.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
