With two days to go to Singles Day 2017 – the world’s biggest shopping event – we speak to Don Zhao, co-founder of Azoya, about the mood amongst retailers in China as the pressure mounts and what new trends to expect this year.
Some key findings from the interview include:
1. Singles Day 2017 looks set to be more international than ever, as more overseas retailers come on board.
2. The build-up to this year’s event has been bigger than ever and it’s likely to break last year’s record sales figures.
3. Singles Day has changed shopping behaviour in China permanently.
Read the full interview below:
Q: In your opinion, is there as much excitement and anticipation about Singles Day 2017 amongst Chinese consumers as there has been in previous years? Or is the novelty wearing off and are shoppers more interested in quality than price?
A: “There’s been a noticeably bigger build up this year and it feels like everyone is fighting for attention. Online market places, such as Tmall (owned by the Alibaba Group) and JD.com, and retailers are far more proactive than in previous years and launched promotional campaigns much earlier – from the middle of October. Tmall has also gone to the extreme measure of locking its stock for Singles Day for two weeks prior to the event, thus fuelling demand on the day.
“Singles Day is continuing to grow and is no longer just an online shopping opportunity, with bricks and mortar stores in China promoting Singles Day far more heavily this year than previously.”
Q: What new trends do you expect to see on Singles Day 2017?
A: “It is clear that Singles Day is now a national annual event and a key date in the calendar for every business involved in the Chinese ecommerce ecosystem – from system suppliers to payment companies – and extending from online to offline retailers. Within the industry, there is a feeling of intense pressure as Singles Day approaches.
“Singles Day 2017 looks set to be more international than ever. It was originally a domestic affair and 2016 was the first year shoppers were able to purchase products from overseas retailers – on Tmall. This year many more overseas retailers are coming on board, both on market places and as independent retailers with their own Chinese website.”
Q: What do you think the most popular product categories will be? And why?
A: “Overseas products will be very popular and I would expect to see beauty and cosmetic items do particularly well, as there is a huge appetite for Western brands amongst Chinese consumers.”
Q: From a retailer’s perspective, is Singles Day a golden opportunity or a logistics and fulfilment headache?
A: “In all honesty, Singles Day has become a headache for many ecommerce businesses in China. It puts an enormous amount of pressure on retailers which have to deal with the numerous challenges associated with it – such as returns, customer complaints, delivery and risk of overstocking.”
Q: If a retailer has chosen not to participate in Singles Day, does this put it at a major disadvantage?
A: “There are advantages and disadvantages to participating. If you are a retailer on Tmall’s marketplace, you will have to adhere to its strict guidelines, such as not sell any Singles Day stock for the previous two weeks or do any individual promotional campaigns, which can be frustrating. Shoppers also tend to purchase fewer items in the weeks before and after Singles Day which distorts sales patterns. However, if you are on a marketplace and don’t join Singles Day you will miss out any promotion by the marketplace so your traffic will be flat.
“Discount days such as Singles Day have distorted customer behaviour. They have come to expect them and so retailers just need to accept this and be as prepared as possible.”
Don Zhao is co-founder of Azoya, which helps overseas retailers break into China via cross-border ecommerce. The company works with more than 35 overseas retailers in 12 countries, such as La Redoute, the largest online retailer of women’s apparel in France; Feeluniqe, the largest online premium beauty retailer in Europe; and GetTheLabel, part of the JD Sports group.