Almost a week from now, millions of online shoppers will flock to spend on the world’s biggest online shopping festival: Singles’ Day.
According to a report by US-based consulting firm Bain & Company, online shoppers in China spent a whopping 410 billion yuan (US$60.4 billion) in 24 hours last year – double what Amazon generates in an entire month, during the online shopping festival which takes place on November 11.
The festival is seen by many investors as a proxy for consumer spending in China as well as an important barometer for economic health. However, with the rapid spread of the Covid-19 pandemic, the stakes are particularly high for retailers.
What is Singles’ Day?
Written numerically as 11/11, November 11 looks like “bare branches,” a Chinese expression for the single and unattached. During the 1990s, several Chinese university students decided they would celebrate their singlehood on this date, which they dubbed Singles’ Day or Double 11.
This became seen as an anti-Valentine’s Day of sorts, and many of China’s singles began splurging on themselves on the day in what seemed to be against social stigma of being in a relationship.
It took Chinese E-commerce sites years to cash-in on this day, which was kickstarted when Alibaba Group was the first to officially brand the event as an annual shopping festival back in 2009, as it offered discounts of at least 50 per cent and free nationwide shipping.
Only 27 brands took part in the first event, but by last year – a decade after it first launched – participation had ballooned to more than 200,000 brands from 78 countries and regions, helping lift Alibaba to a Singles’ Day record of 268.4 billion yuan (roughly $40.9 billion).
Skincare sales expected to dominate
Skincare products are expected to continue their upward sales surge as Singles’ Day is around the corner.
According to a report by US-based market research firm NPD, prestige beauty E-commerce sales reached $710 million in August 2020, a 61 percent increase over the same time period last year.
NPD’s report added that skincare E-commerce sales increased 71 percent in China, and 59 percent of prestige beauty consumers purchased skincare products online in August, making it the best-performing product category for the month.
“While the makeup category is as big as the skincare category in the US and fragrance is performing better than other categories in France, skincare is by far the biggest category in China, making up more than half of sales from prestige beauty consumers in the country,” Stanley Kee, Managing Director, APAC at NPD said.
As the second biggest segment in skincare, face cream gained a 70 percent year-over-year (YoY) growth in August. According to NPD, 16 percent of face creams sold via E-commerce in China contain clinical ingredients, which saw the most growth, gaining 163 percent versus August 2019.
“Consumers have obviously changed their skincare routine this year, focusing on self-care as they spent more time at home; and many of those using more products will likely stick with their new routine as life continues to normalize in China, helping the skincare category to maintain its sales momentum,” Kee highlighted.
Covid-19 & Singles’ Day
According to Alibaba, the E-commerce platform will open two sales windows this year, the first being from November 1 till 3, as well as the whole day on the November 11.
According to the Hangzhou-based tech giant, the additional sales window is to provide opportunities for new brands and small businesses to participate. There will be more than 2 million new products this year, doubling the amount from last year, the company said.
Amid an E-commerce boom resulting from the Coronavirus pandemic, this year’s Singles’ Day is expected to have an even bigger global reach than previous years. More than 2,600 new international brands will be offering promotions on the Tmall Global platform, according to Alibaba.
The company’s logistics arm Cainiao will charter around 700 flights for the shopping festival and more than 50 percent of this year’s cross-border parcels are expected to be delivered twice as fast as its usual speed, the company said.