How Alibaba created the world’s biggest online shopping day

For most of the world, this Friday will be just another day. But in China, internet users will be throwing money at their screens. At the end of the day, Chinese users will almost certainly have set a new record, spending more money online in a single day than has ever been spent before anywhere.

Why? Because all of the ones in the date – 11/11 – reminded some college kids of loneliness.

How Singles Day got started

Nanjing University, the possible birthplace of the original Singles Day

For a country where many major holidays can be traced back thousands of years, Singles Day is a refreshingly recent invention. No one is quite sure exactly who first thought it up, but it definitely emerged as a student tradition in the mid-1990s. The most widely-accepted story is that it emerged from the dorms of Nanjing University in 1993 when four single male students got together to discuss how to break free of the loneliness and monotony of single life. One suggested that because of the ones in the date, November 11 would be a good day on which to organize activities for singles.

What started as an idea executed by a small group of friends gradually became a university tradition. Singles Day grew into something like the anti-Valentines day, a day China’s single young people – at first just men, but later single women adopted the tradition as well – could use as an excuse to get together and do fun stuff like visit karaoke bars together. Traditions like eating youtiao – fried dough strips that resemble the number one – in the morning evolved as the holiday spread, and by the late 2000s it had become pretty widely known, especially among China’s youth.

The fact that the holiday went from local to national in less than two decades likely has a lot to do with China’s demographics and its culture. The country has a serious gender gap – by 2020 it will have 35 million more men than it does women – so there are plenty of young, single men who can relate to the desire to have fun and celebrate independence without a significant other. And because there’s immense family pressure on many young Chinese men and women to find a suitable partner and marry young, young people of both genders embraced the holiday as a kind of release. Singles Day was about being with friends and having fun.

Monetize this

I say the holiday was about being with friends and having fun because now Singles Day is about shopping – mostly online shopping. How did an underground youth holiday go corporate? It’s a long story, but the short answer is Alibaba.

By the late 2000s, Singles Day was well known enough that most of China’s internet users – who skew young and urban – were familiar with it. There might have been some small shops online and offline offering sales on that day earlier, but no major company bought into the holiday until Alibaba launched its first Singles Day online sale in 2009.

A Tmall ad from 2012 that uses the original Chinese term for “Singles Day”

An Alibaba representative explained to Tech in Asia that the company’s intent wasn’t to tie its day of sales to any particular holiday. November 11 was just a convenient date that fell during a holiday lull: sales were common before China’s National Day in late September and again before Spring Festival in the first two months of the year, but late autumn had no recurring retail sale period. November was thus the perfect time for big online sales; there was no offline sale to compete with and at a time when ecommerce was still growing in China, getting consumers’ undivided attention was important.

That said, although Alibaba plays down the Singles Day connection and has since even trademarked a different term – double-eleven – for its day of sales, it seems unlikely that the date of November 11 was chosen by total coincidence. After all, it was a holiday that already had some cachet with China’s young, urban internet users, who were Alibaba’s primary customers. Moreover, the company used the original term for Singles Day invented by university students – guanggunjie – in its marketing materials until as late as 2012.

Whether or not the original bachelor-focused folk holiday really played a role in its inception, it’s clear that Alibaba’s 2009 sale took things in a new direction. In that first year, Alibaba was the only major ecommerce company to offer a sale, and it featured just 27 brands offering discounts via its Tmall marketplace. The sale was definitely successful, but it wasn’t enough to redefine the holiday on its own. In fact, when your humble author wrote an article introducing Singles Day for a cultural magazine prior to 2010’s Singles Day, I didn’t even mention ecommerce because it wasn’t yet a defining characteristic of the holiday.

2010 changed things, though. Alibaba went bigger, offering more brands and deeper discounts. But other companies had noticed the potential of the 2009 sales bonanza and decided to follow suit. Ecommerce platforms like JD had their first major Singles Day sales in 2010, and overnight Singles Day went from a Tmall sale to something that was beginning to look like Cyber Monday in some western countries.

Over the next few years, Alibaba, JD, and other Chinese ecommerce players all expanded their one-day discounts, and sales grew exponentially. The holiday had come at precisely the right time for Chinese consumers – after years of uncertainty about buying things online, people were finally embracing ecommerce, and Singles Day savings helped to propel the growth. On Singles Day in 2012, for example, Alibaba’s marketplaces, Taobao and Tmall, did about US$3 billion in sales. In 2013 that number nearly doubled, and Chinese shoppers had obliterated America’s Cyber Monday spending records in just the first few hours of the sale. 2014 saw Alibaba shattering previous records yet again with a US$9.3 billion haul.

2015 was another record-breaking year for Alibaba. It brought in US$14.3 billion during the sale, but it also made most of its sales via mobile for the first time ever. Alibaba competitor JD also saw its sales go mostly-mobile in 2015, marking Singles Day’s transition to a mobile-first shopping holiday.

Tmall’s front page right now: all about Singles Day

This year: more, more, more

This year’s Singles Day online shopping bonanza is likely to break all the records set last year. Alibaba will almost certainly crack US$15 billion; the real question is whether its growth can remain strong enough to hit US$20 billion. Alibaba is hoping to hype consumers into spending more this year with a pre-sale extravaganza that features famous entertainers including Katy Perry, but it also faces more competition as virtually every Chinese ecommerce player has hopped onboard the Singles Day sales train at this point.

Another interesting number to watch this year – though one tougher to track in real-time – will be returns. Alibaba and competitors like JD post sky-high revenue numbers every Singles Day, but those revenue numbers include orders that were later canceled or returned. In the past, Alibaba has said these numbers are trivial – a single-digit percentage of Alibaba’s total sales revenue – but outside estimates sometimes suggest the difference is significant. Research firm Gartner Inc. estimated that about 25 percent of China’s Singles Day purchases in 2013 were returned, for example.

What number are you expecting Alibaba to hit for Singles Day this year?

This post How Alibaba created the world’s biggest online shopping day appeared first on Tech in Asia.

from Tech in Asia https://www.techinasia.com/singles-day-niche-bachelor-holiday-worlds-biggest-online-shopping-bonanza
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