China’s single people face constant social expectations that they find a partner. The pressure can be overbearing. But now they are learning to let off steam through retail therapy.
On Monday, in a 24-hour period starting at midnight, Chinese netizens spent billions of dollars online on consumer goods. What started out as an opportunistic attempt by an ambitious internet enterprise to create a shopping holiday in a quiet domestic retail period just a few years ago has exploded into the biggest annual online retail event in the world.
Singles Day, as the event is known, has taken place on November 11, or 11/11, every year since 2009. For many Chinese, it presents a chance to forget about their single status in a country where most people still get married young, as is by and large still expected in society. To a small but growing number, it is an occasion to commemorate their singledom.
Either way, customers flock to virtual checkouts. Final sales data won’t be out until later, but retailers were reporting huge sales increases from a year earlier. For anyone involved in the industry or keen to see Chinese consumption increase, it’s been a good start to the week.
State media reports on the phenomenon point to the origins of Singles Day in the early 1990s, when a group of unmarried citizens decided to protest against the pressure to wed. Until the shopping element was attached four years ago, however, it largely languished in obscurity.
E-commerce giant Alibaba Holdings spotted an opportunity to promote online sales, its core business. The company, which does not sell merchandise itself, gathered together vendors scattered across its multiple online sales platforms and asked them to offer discounts on 11/11.
Transactions processed by Alibaba on Monday topped US$5.75 billion (RMB35 billion), up from a few hundred million dollars when it first started. The event is so keenly observed in China that the firm even erected a huge digital screen at its headquarters in Hangzhou to feed real-time sales data to hundreds of waiting journalists.
Such press coverage will only further bolster the reputation of the company on the global stage as it prepares for an initial public offering. It is considering a listing in Hong Kong, New York or even maybe London (depending on who’s talking) that could value it at close to US$100 billion.
Rivals haven’t missed a chance to copy Alibaba’s success. Almost all retailers and internet platforms in China now have some form of special promotion at this time of year. Electronics retailer Suning, which is investing heavily in online as offline sales slow, internet portals Sina and Sohu and search engines Baidu and Qihoo all saw big traffic. Foreign brands including Gap, Microsoft, Steve Madden and Adidas rolled out related deals to tap demand.
For China’s burgeoning tech firms, perhaps more notable than the headline sales figure was the surge in purchases on mobile platforms. “Mobile devices have delivered meaningful contributions this year and helped drive overall transaction volume higher,” analysts at Barclays in Hong Kong said in a report covering the event.
Alibaba saw sales from mobile hit US$164 million in the first hour of Singles Day, higher than the whole single-day mobile value of US$157.5 million in 2012, according to the Barclays report. Over at Tencent, a large internet platform operator, more than 13% of total sales recorded on Monday at its 51buy.com e-commerce site came from its WeChat mobile application.
China’s surge in mobile spending is driving e-commerce, which in itself is helping boost domestic consumption. This is a primary goal of the central government as it rebalances the economy. Around one-third of Chinese online shoppers make purchases at least once a month via their smartphone, according to the results of a PwC survey published in February.
Mobile devices are also helping to unlock demand in rural areas, where PC ownership is low. While incomes there are gradually rising, consumer demand is not sufficiently being met by bricks and mortar stores, particularly by foreign brands. Sales on mobiles will continue to rise as domestic tech firms like Xiaomi continue to bring down the cost of smartphones.
Single people are emerging as an important market segment, too. Unleashing their potential has been a boon to consumption. More such innovative retail concepts should be welcomed.