On Singles Day in 2019, Alibaba’s sales broke US$12 billion in the first hour. Within an hour and a half, it exceeded its total Singles Day sales in 2016.
A new gross merchandise value (GMV) record of RMB268.4 billion (US$38.38 billion) was ultimately set. This was equivalent to 2.3 times the combined online sales of Black Friday and Cyber Monday in the United States.
But a fundamental shift in consumer patterns, coupled with brands responding to this shift has led Alibaba to tailor the coming Singles Day in 2020 to better serve these market forces.
Zooming in on Southeast Asia
The Alibaba digital ecosystem is rolling out several new initiatives to help relieve China’s pent-up consumption demands.
For businesses in Southeast Asia, Alibaba has created strong partnerships across the region, with more than 70 brands collaborating with Lazada, Alibaba’s e-commerce service in the region. More than 350,000 sellers and brands across the region will be participating, including local brands in Malaysia, Singapore, Thailand, Vietnam, Indonesia, and the Philippines.
Just like Alibaba’s gala show, Lazada’s signature 11.11 Super Show will see local celebrities and performers celebrating 11.11 with a series of performances in each market. Shoppers will be able to win exclusive vouchers through various localised segments while tuning in to the show.
Jessica Liu, Co-President and Regional Head of Commercial of Lazada Group said that, “Online shopping is not omnipresent among all Southeast Asian consumers, so it was a big change for them as more of them began to turn to online shopping as their main purchasing medium during COVID-19.”
Merchants to Ride Digital Growth Momentum
The digital economy in Southeast Asia is also on a strong growth momentum – even before the COVID-19 pandemic.
To take advantage of this, 2020 will see stronger, more visible partnerships across the region, with more than 70 brands collaborating with Lazada to create a visually fun brand showcase, featuring signature and hero products from their exclusive 11.11 catalogue. More than 350,000 sellers and brands across the region will be participating, including Lancôme, Under Armour, Swatch and Castrol, etc. Lazada also unveiled their first Lazada regional brand ambassador, South Korean actor and model, Lee Min Ho.
Lazada’s entire logistics network covers six countries across Southeast Asia, with 45 logistics partners, over 15 warehouse facilities and over 400 fulfilment centres and hubs. To prepare for the large volume of deliveries, Lazada has over 40,000 warehouses and logistics staff to support an approximate of 20 times the volume of regular deliveries from domestic and cross border sales.
For 2020, Alibaba is also planning to evolve Singles Day from a ‘single’ to a ‘double’ festival. There will be double the entry platforms participating (Taobao and Alipay), double the shopping periods (an additional sales window for the very first time from November 1 to 3 ahead of the regular sales on November 11 proper), and a double gala (the Tmall 11.11 Livestreaming Grand Ceremony on October 31, and the Tmall 11.11 Countdown Gala on November 10).
Chris Tung, Chief Marketing Officer, Alibaba Group said that this means brands have more opportunities to showcase their products to the world – as well as double the opportunities for bargain-hunting shoppers. Global brand recovery will be a key focus of this year’s event, positioning the world’s largest shopping day as a catalyst for their recovery from the pandemic.
“Through the pandemic, everyone has been experiencing new lifestyles and new ways doing everything from home – whether it’s shopping from home, or working from home. Thanks to the infrastructure of e-commerce, we are able to enjoy the benefits and convenience that online shopping brings to us. This has fundamentally changed how people shop, work with colleagues, and spend time with family. It has made digital transformations and online shopping more essential,” explained Tung.
By having two key sales periods, consumers who buy during the first phase will receive their products sooner, while also lessening the strain on key systems like logistics.
In response, over 2,600 new overseas brands, more than two million new products, and 250,000 brands have signed up to join this year’s Singles Day. Luxury brands, who normally shy away from online sales, are joining for the first time to explore a new sales channel that customers are flocking to. They include Prada, Cartier, Montblanc, Piaget, Balenciaga, and Chloé.
Over the past few months, Chinese ‘revenge shoppers’ have turned to online platforms for their overseas purchases. Alvin Liu, President, Tmall Import and Export, has said that there has been a sharp increase in online purchases of imported products due to the impact of the pandemic on international travel.
To meet the demand for international products, Alibaba’s cross-border e-commerce unit is also ramping up its offerings. Tmall Global will debut over 2,600 new brands from overseas, and Alibaba Group’s cross-border e-commerce platform Kaola will also be offering products from 89 countries and regions.
Livestreaming as Centre Stage
The number of livestreaming viewers in China reached 560 million in March 2020, accounting for 62 percent of the country’s total number of Internet users, according to a report released by the China Internet Network Information Center. Of this figure, 265 million engage in viewing e-commerce livestreaming shows. This translates to big bucks: according to Coresight, livestreaming generated US$63 billion in 2019 and, according to iResearch, will double to US$138 billion in 2020. Over 100,000 brands have used it, including international brands like Ralph Lauren, Clinique, Tommy Hilfiger, Lancôme, Levi’s, Louis Vuitton, L’Oréal, Burberry and more.
Singles Day will be no different. 60 percent of the Taobao Live sessions will be conducted by merchants themselves, while more than 400 company executives and 300 celebrities and artistes will be joining in the livestreaming sessions too across the sales period.
This is a new strategy by Alibaba to also capture the Generation Z cohort of customers, with a greater emphasis on street fashion and technology, with big-ticket items such as cars and houses also on offer on the platform for the first time.
A Cross-border Festival
For all of e-commerce’s promise, it is nothing without logistics and fulfilment. As Alibaba’s key logistics arm, Cainiao has been investing in cutting-edge logistics technology and innovations such as Automated Guided Vehicle (AGV), automated parcel collection machine and smart lockers to support the greater volumes of orders made during 11.11. During Singles Day in 2019, Cainiao processed more than 1.8 billion delivery orders.
Shorter delivery time is what completes a pleasant shopping experience, and that’s where Cainiao comes in. To handle a large number of orders, the logistics company is ramping up delivery operations, pre-stocking popular items in domestic and international warehouses and is adopting more artificial-intelligence technologies.
For deliveries outside China, over 700 chartered flights will support about 90 percent of Cainiao’s parcel deliveries. That will shave 60 percent off delivery time for more than half of them, due to an algorithm that calculates and consolidates parcels directed to the same destination regardless of the location of their departure. For China-bound packages, Cainiao will also add more flights and long-haul cargo ships to meet the rising demand for imported goods.
The delivery-related upgrades come after Cainiao announced plans in June to ramp up investments to expand its global logistics network and slash delivery times over the next three years, with its goal to deliver all parcels within 24 hours in China and 72 hours globally.
James Zhao, General Manager, Cainiao Global Supply Chain, Cainiao Network said, “Consumers expect efficient and speedy delivery of their items – they want to receive them on time. In addition, more also prefer contactless deliveries. From the merchants’ perspective, the pandemic has affected the import networks, which they rely heavily on as well, because they recognize that, for example, many consumers in Southeast Asia purchase a high volume of items from countries such as South Korea and Japan. Hence, we have been working with partners in these countries to establish a lifeline green channel to be able to make this happen.”
Empowering the Small Business
In 2009, before the first Singles Day sale, Alibaba founder Jack Ma wrote an op-ed in the International Herald Tribune, extolling the agile virtues of small businesses. They can respond to customer demand much faster, and operate with minimal overhead, noted Ma.
He argued that small businesses will not only compete with, but even eclipse the incumbent giants in the field of e-commerce. With the power of e-commerce, what was once the sole realm of large supply chain management teams can now be taken advantage of by entrepreneurs.
Ma wrote that, “These Netrepreneurs will operate with minimal overhead, allowing for both lower prices and lucrative margins, as well as fair compensation for employees, suppliers, partners and themselves. Their primary task: focus on making customers happy and treating partners and other stakeholders fairly while the technologies of the platform take care of the rest.”
Today, Alibaba now calls itself a data and technology company, one that provides digital tools to help the businesses on its platforms. That, in turn, leads consumers to look to those platforms for their every need, from shopping and services to entertainment and travel.
When China imposed a lockdown in Wuhan and other cities to curb the spread of a novel coronavirus, Alibaba was not spared the effects of COVID-19. In a quarterly earnings call with analysts, Alibaba’s CEO Daniel Zhang said, “The delay in employees returning to work following the Spring Festival holiday is preventing merchants and logistics companies from resuming operations. For the first two weeks after the Chinese New Year holiday, we have observed negative impact on our commerce business as merchant operations have not returned to normal and a significant number of packages were not able to be delivered on time.”
Nevertheless, COVID-19 proved to be a silver lining for the company. Sales from the e-commerce business alone jumped 34 percent to RMB133.32 billion (US$19.27 billion) in the quarter ending in June. Alibaba’s stock has soared 23 percent this year as investors globally poured money into technology businesses seen as “stay-at-home” winners from the pandemic.
And although COVID-19 has fundamentally changed the landscape of e-commerce, opportunities abound for SMEs as well as for Alibaba – much like how SARS pummelled China and Hong Kong in 2003. In the same earnings call, Zhang said, “Seventeen years ago, the e-commerce business experienced tremendous growth after SARS. We believe that adversity will be followed by changes in behaviour among consumers and enterprises, and bring ensuing opportunities. We have observed more and more consumers getting comfortable with taking care of their daily living needs and work requirements through digital means. We are confident in the ongoing digitization of China’s economy and society, and are ready to seize the opportunity to build the foundation for the long-term growth of Alibaba’s digital economy.
Thus, in a changing world, Singles Day also offers a chance for SME merchants to show to the world their adaptability and resilience. The strength of big brands and small businesses will be on show this November to the world – thriving together on one platform.