Calm before the storm: China preps for world’s biggest shopping day

Shoppers, online merchants, ecommerce companies, and logistics firms across China are busy gearing up for Singles Day tomorrow. The 24-hour online sales event, on November 11, is China’s biggest shopping day. It’s also the world’s biggest shopping day – a distinction the annual event achieved in 2012 when Chinese shoppers surpassed their US counterparts during Cyber Monday.

China’s shoppers have been saving up their purchases ready to get a Singles Day discount, according to Brian Lee, a businessman in Shanghai who’s China’s only authorized merchant of handbags by Elle, the French luxury brand. That’s caused a sales slump, both online and offline, since about the start of the month. Lee tells Tech in Asia that his business, Sino Supreme, has seen online sales plummet 80 percent since the start of November, and offline retail down by as much as 50 percent, as people eye up purchases but wait for the Singles Day sales to kick in at midnight tonight.

But the pay-off is worth it. Lee says that 15 to 20 percent of his company’s revenues are generated during the 24 hours of Singles Day. He’s anticipating 27,000 orders tomorrow, up from 25,000 on the same day a year before. He reckons he’ll be able to ship out all the orders within two days, so customers shouldn’t be kept waiting despite the rush.

Lee has an online presence, selling Elle handbags and purses, on both of China’s top marketplace sites, Tmall (run by Alibaba) and JD, but he says that Tmall accounts for 60 percent of his online sales.

Last year, Alibaba’s two marketplaces, Tmall and Taobao, saw US$5.7 billion worth of sales for its tens of thousands of merchants during Singles Day, up from US$3.1 billion the year before. Alibaba first started pushing the sales day in 2009.

When the ship hits the fan

China’s logistics giants are also bracing for the annual peak, with China’s top private delivery firms, such as SF Express, STO, and YTO, ready to take on tens of thousands of extra staff across the country as everyone shifts into top gear.

Wu Jian Fei, the head of operations at YTO, says that China’s ecommerce growth over the past decade means that “last year’s peak turns into the next year’s low season.”

He expects one massive logistics center on the outskirts of Shanghai to see two to three times more packages on the night of November 11 than on an average day. The firm is preparing this facility – just one of 72 transshipment warehouses it has across China – to handle more than 1.3 million packages in 24 hours. That’s up from 800 million to one million at the same facility right after last year’s Singles Day.

But, with an eye to China’s ecommerce growth, that center has a capacity of two million packages, so it won’t quite be bursting at the seams even after China’s biggest ever shopping spree.

Prepping early

Realizing how important this sales day is, in terms of its impact on annual sales and the chance to bring in new customers to a brand, many online merchants have been prepping for November 11 for months. Lee has been thinking of new ways to attract shoppers to Elle beyond just discounts. That’s why his team started on a Singles Day strategy months ago, working on a range of new Elle products that would be online exclusives for Chinese consumers on Singles Day.

Those exclusives first made an appearance at Paris Fashion Week back in September, and the company then took time to spread word about the new items among China’s fashion bloggers. On November 3, Lee’s team sent out SMS and email coupons to existing shoppers to promote the online-only Elle line-up. Shortly after, the exclusive bags popped up in Elle’s 10 standalone stores across China in a look-but-can’t-buy capacity to build up hype ahead of Singles Day. Lee points out that Elle’s shops within department stores could not take part in the promotion as they’re not allowed to display items that can’t be bought on-site.

Alibaba-JD rivalry