The red posters hanging from the ceiling of Wang Yongcai’s office in Yiwu, Zhejiang province, try to drive home the importance of this one day of the year.
“Don’t be afraid to lose your date, be careful not to lose your order,” one of the posters exhorted as preparations went into full swing at the online accessories seller for the annual Singles’ Day shopping festival.
Wang sells necklaces and earrings on Mango, one of the 10 largest purveyors in its category on Taobao.com, China’s biggest consumer-to-consumer e-commerce platform. For 24 hours on November 11 this year, Mango is aiming to do five times the daily average business volume, during the shopping extravaganza organised by Alibaba Group.
Wang, who launched the company as a university graduate, expected to make very few sales in the 10 days before the festival, and razor-thin profit margins during the event because Taobao’s guidelines demanded discounts of at least 50 per cent on low-margin products.
Still, the slim takings will be more than compensated by prospects of turning casual visitors into return customers, said the 30-year-old.
“Even if we’re not making any profit, we won’t lose much either,” Wang said. “The point is to attract triple or even five times the visitors as usual, let them remember the shop and return another day.”
Last year, Alibaba reported US$14.3 billion in gross merchandise volume sales on November 11 on its three shopping platforms Taobao, Tmall and AliExpress. That’s more than four times the combined amount of the 2014 Black Friday and Cyber Monday sales.
The company’s 2016 haul may increase 29 per cent to a record US$18.45 billion, or 125.7 billion yuan, according to the average estimate in a South China Morning Post survey of analysts who track Alibaba. On Friday with more than 12 hours to go, Alibaba had already logged US$9.6 billion in GMV sales. Alibaba owns the Post.
Cao Lei, director of Hangzhou-based China E-Commerce Research Centre, said there were up to 5 million active shop owners on Taobao, though the total number of accounts could be 9 million.
As many as 144,000 brands including Burberry operate stores on the business-to-consumer platform Tmall, while industry insiders estimated the cross-border platform AliExpress had about 200,000 stores.
Wang usually sells about 200,000 yuan (US$29,360) a day, with necklaces and ear rings going for as little as 1 yuan. On Friday he’s hoping to make 800,000 yuan to 1 million yuan in 24 hours.
“Since the end of September we have been stocking up to prepare for twice or triple the normal volume,” he said.
Still, he was worried whether he would have enough of each product to meet demand on the day.
“This is the biggest challenge for most sellers. There are risks of shortages, and risks of overstocking,” he said.
Sales usually drop by about 30 per cent in the week after the festival, and the three days before it, he said.
Edward Gu, owner of a Taobao shop called Viviei that sells women’s leather apparel, said he would offer discounts but didn’t expect much from the event.
“To most medium or smaller sellers, it’s meaningless,” Gu said. “It’s just combining all the monthly transactions into one day.”
He said the discounts were often not as high as they might seem, because sellers would usually raise prices before the day.
Mo Daiqing, also from the China E-Commerce Research Centre, said there was a shift among online sellers from price-based competition to focusing on the quality of their products and services.
“Both sellers and buyers are becoming more rational,” she said.
Some vendors are asking whether the thin margins are worth the hangover that may follow the 24 hours of madcap online frenzy, as many customers start to deal with their buyers’ remorse.
“What’s worse, there is often a surge in refunds after the rush,” said Viviei’s owner Gu.