China’s online Alibaba is the leader in special events (see this post). As it notes: “Alibaba.com is the leading platform for global wholesale trade serving millions of buyers and suppliers around the world. Small businesses can sell their products to companies in other countries. Sellers are typically manufacturers and distributors based in China and other countries such as India, Pakistan, the U.S., and Thailand.
Each year, Alibaba runs a Singles’ Day on November 11 (that it created) targeted at final consumers. The revenues generated on Singles’ Day dwarf those on Cyber Monday. This year, Alibaba used Singles’ Day to “launch new initiatives in globalization, logistics, and mobile and omni-channel commerce to improve the shopping experience for buyers and sellers.”
Why does Alibaba do so well on Singles’ Day relative to Cyber Monday and U.S. online retailers? As reported by Knowledge@Wharton:
“In just one day — November 11 — Alibaba Group generated a massive $14.3 billion in gross sales for China’s major shopping event, Singles’ Day — a figure equivalent to seven times the volume Cyber Monday generated last year. As Cyber Monday is now here, U.S. online retailers and other E-commerce players are likely turning to Alibaba’s performance on Singles’ Day for lessons learned and takeaways.”
“But, as one expert noted, U.S. online retailers are likely to face some steep challenges in recreating aspects of Alibaba’s success, in which merchants across the board discounted items by 50% or more for Alibaba’s online shopping site Taobao Marketplace and also on its third-party shopping platform Tmall.com.“
“Beyond offering consumers steep discounts for Singles’ Day, Alibaba also instituted an unusual strategy that U.S. retailers, in the end, may want to emulate for Cyber Monday, experts point out. The company unveiled a glitzy, star-studded TV show that aired on the eve of Singles’ Day to prompt viewers to snap up specials via their computer, tablet, smartphone or Internet-enabled TV or set-top box.”
I had always assumed that Cyber Monday was a day when online retailers received the most profit versus any other normal business day. I had no idea that there was a more profitable day established in another country. Reading this article was the first time I had ever heard of Alibaba, but I understand why they are more successful. For starters, Cyber Monday is mainly advertised in the U.S., whereas Alibaba has expanded their market to be inclusive of several other countries. Not to mention the main appeal of Cyber Monday is buying gifts for others, while Alibaba markets to people of varying relationships statuses. If U.S. retailers intend to earns profits equatable to Alibaba expanding their market to other countries, and people intending to buy for just themselves, would help them.
The Alibaba single day sales exceeded 14 billion dollars, and the data showed that most sales mainly came from Tmall, the high-end online B2C platform. Recently, Alibaba introduced a lot of international famous brand (such as Apple, Amazon, Estee Lauder, GNC and Costco) to open their own shops on Tmall, and help Chinese consumers to buy their ideal foreign products online, but not from individual overseas buyers. (Individual overseas buyers charge a commission fee and a higher exchange rate, and also have safety problems.)
Most Chinese consumers seek to purchase foreign products, because in general, foreign brands have higher reputation and better quality than Chinese brands. Also, the price of foreign products sold on Tmall is lower than the price in the mall. Not to mention the surprising lowest price at single day. For example, Jawbone UP2 smart band sold only $99 at single day. (Ordinary $143)
However, the stock fall again even after its record-breaking sales. It may because of the unsure problem as high return rate and sales volume cheating.
At last, cannot forget to mention that Alibaba also made another shopping holiday- Dec. 12th (as 1212), which will be another shopping mania day.
Great comment
I think Alibaba’s innovative discount strategy is how the business has prospered so much. Constantly monitoring what other businesses are doing, Alibaba has constructed a business model that has really shined over the past couple of years.
Here in the U.S., sale events such as Black Friday and Cyber Monday have been heavily promoted. While the event is similar to the China-Based Singles’ Day, there is one difference that separates Alibaba from the companies here in the states. The difference is that Alibaba is just one company. Unlike the Cyber Monday here which consists of separate individual retailers, Singles’ Day only has Alibaba running the show. That means that Alibaba could start up a star-studded TV show to promote the event and build up the hype for Singles’ Day as more of an annual tradition rather than a time to make unnecessary purchases. People will likely give in to the Singles’ Day hype and make a purchase or two after seeing their favorite celebrities participating in this event. Which creates this notion that Singles’ Day is a “holiday”, and I should celebrate it by going online and shop from Alibaba’s list of deals.
I believe that by having this single day purchase experience, Alibaba is creating a major advantage in the market. They are like no one else creating value for customers in a different day of the year. In other words, Alibaba is doing things differently, things that other competitors aren’t doing.
I think that people in general is more interested in cost other than just going for a discount when everyone else in the US is, like black Friday. People is begining to understand that black Friday is a method of advertisement and perhaps they are not really give them value to customers.
By implementing this strategy Alibaba is gaining success using these great niche.
China’s Single based day is a great way for people to get great deals. They cut their prices more than 50 percent to grab people’s attention and to make them buy closer to the holidays. A way they grab people’s attention is through the light show and the online shopping. They have lower prices when you shop online as compared to going to the store. The only thing that is nice for singles is that they have a beautiful light show that brings them to the store and then they shop. This is a great incentive to get people to step foot in their doors.
I never heard of Alibaba’s Singles Day until reading this article but i found it extremely interesting to find out their is a bigger cyber selling business day than Cyber Monday here in the United States. They came up with a plan and a marketing strategy and found a way to attract all kinds of different consumers to make this day very successful and profitable.