In what is likely the most expensive television advertisement for Singles Day since the shopping festival was founded in 2009, American actor Kevin Spacey--appearing as his character U.S. President Frank Underwood from House of Cards --wished the audience a happy Singles Day and listed the number of items he wanted to buy to celebrate.
Singles Day, or Double 11, falls on November 11 every year and is China's equivalent of Cyber Monday in the United States, though it dwarfs its American counterpart. Chinese e-commerce giant Alibaba broke its own record this year, recording $14.3 billion in sales over the 24-hour period.
As the shopping festival has grown in popularity each year, so have the promotion campaigns and advertisements from China's leading companies, which usually begin about a month before the holiday. But it's not just domestic companies looking to get in on the action. Foreign companies are increasingly opening their own stores on Chinese e-commerce sites as demand for foreign goods continues to burgeon in the country.
This helps explain why Alibaba chose Spacey to appear on its television show on November 10 to kick off the shopping spree. American products are as popular in China as its film stars, movies and television series. Costco's online store on Alibaba's Tmall had presale volume exceeding 10 million yuan ($1.6 million), according to data released on November 6 by Tmall Global, Alibaba's cross-border e-commerce platform. The American superstore sold more than 20 million yuan ($3.14 million) worth of good in just one hour on Singles Day, ranking it first among foreign brands on Tmall Global, according to the platform's general manager Liu Peng.
Singles Day surpassed Cyber Monday in 2012 to become the world's biggest online shopping day. Some foreign firms, including Costco, opened stores on Tmall to cash in on the holiday.
"Our performance on Singles Day shocked and surprised our management, and it totally transformed our annual business plan," Costco said in a statement after last year's Singles Day. The superstore opened its Tmall store last October and sold $3.5 million worth of goods on Singles Day last year.
Its performance didn't go unnoticed. More foreign brands are flocking to e-commerce sites to capitalize on Chinese consumers' growing desire for foreign products. Alibaba has been selling its platform as a way for foreign companies to reach domestic consumers. More than 5,000 international brands from 25 countries and regions attended Tmall's Global Singles Day promotion event this year, according to an Alibaba release.
At the launching ceremony of 2015 Tmall 11.11 Global Shopping Festival on October 13, Alibaba Chairman and founder Jack Ma outlined the company's Double 11 promotion strategy in English to an audience comprised of diplomats from 39 countries and representatives from more than 70 partnering international brands and trade associations.
"There are currently 300 million members of the middle class in China, and that number will rise to 500 million in 10 to 15 years. China's consumption power will rise quickly, and that will not only drive China's economy but also the world's economy," Ma said at the ceremony.
Alibaba isn't alone in seeing demand. Its major rival, JD.com, launched its cross-border platform JD Worldwide last April and its first logistic base for cross-border e-commerce in October in Guangzhou, capital of south China's Guangdong Province.
JD.com said consumers had placed more than 32 million orders on its online marketplace on November 11, up 130 percent compared with last year's Singles Day. The number of orders on JD Worldwide that day rose by 366 percent compared with October's average daily figure, with orders for maternal and baby products growing more than 10 times.
Singles Day hasn't just changed how foreign companies look to enter the market. More Chinese retailers are launching online-to-offline (O2O) platforms to survive increasingly fierce competition over the holiday as Chinese consumers' habits shift to buying online using mobile apps.
Intime Retail, one of China's leading department stores, has been working with Alibaba since 2013 to provide more offline services to its customers. Consumers pay for their orders online on the Intime flagship store on Tmall after selecting the products in the offline store. Sales volume of Intime flagship store on Tmall tripled last year's volume to reach 20 million yuan ($3.14 million) in nine hours on November 11 and rose to 28 million yuan ($4.4 million) in 15 hours.
In March 2014, Alibaba invested about $692 million in Intime Retail in exchange for 25 percent equity interest in the company. Alibaba became the controlling shareholder after former Intime Chairman Shen Guojun transferred his shares in July 2015.
"The future economy will be a combination of the real economy and the digital economy," said Zhang Yong, CEO of Alibaba Group and Chairman of Intime Retail, at a press conference in July. He announced that Alibaba will take advantage of big data to improve Intime's services for consumers and delivery system of goods. "We hope new Intime with Alibaba's edge on Internet can create more opportunities for O2O businesses and play a key role in Alibaba's e-commerce operation," he said.
More than 1,000 merchants have joined Tmall's O2O promotion campaign, including retailers specializing in clothes, cosmetics, electronics, automobiles, furniture and tourism. The offline stores provide customization, distribution and after-sale services to online shoppers.
But even as companies upgrade their services to meet Singles Day demand, customers are growing weary of the constant promotion and billboards advertising goods.
Wang Chen, an employee at a foreign company operating in Beijing, passed billboards advertising the shopping holiday in subways stations and on bus stops every day for nearly a month before November 11.
"Now there are various promotion events hosted by e-commerce platforms in a whole year, ranging from holidays to the manufactured shopping festivals, such as May 20, June 18 and Double 12 (December 12)," Wang said. "These events also offer irresistible discounts. It's unnecessary to rush to buy on Singles Day. I'm a little tired of the overwhelming promotion advertisements."
For the past six years, Singles Day has developed the online shopping habit of China's youth. With consumers becoming savvier and the e-commerce market becoming more mature, Singles Day may soon hit its pinnacle in per customer spending.
In a survey from Renren.com, a social network site targeting Chinese college students, 65.9 percent of respondents born in the 1990s said they don't splurge on Singles Day. Instead, they only buy goods that fit their actual needs.
And for foreign companies looking to gain more profits on Singles Day, it will take more time before most Chinese consumers are familiar with all overseas brands and products.
"The transaction volumes of cross-border e-commerce during Singles Day mainly rely on maternal and baby commodities, cosmetics and health foods, which are simple substitutes for Chinese goods," Zeng Bibo, a column author for e-commerce news website Ebrun.com, wrote in an article.
He estimates that the transaction volumes of Tmall Global will occupy less than 3 percent of Tmall's total volume.
Copyedited by Jordyn Dahl
Comments to firstname.lastname@example.org