The world’s busiest shopping day has wrapped up for 2019, setting a new record for the value of online transactions processed in a 24-hour period.
This year Alibaba generated US$38.4 billion of gross merchandise volume (GMV) during its November 11 sale, an increase of 26 per cent compared to 2018.
The growth story is a familiar one, each year the Chinese sale dwarfs the likes of Cyber Monday and Black Friday in the US. (Adobe predicts sales between Black Friday and Cyber Monday will generating US$29 billion this year).
As well as providing an opportunity for Australian retailers to enter the Chinese market, the day provides an insight into the future state of retail. For example order volume peaked at 544,000 orders per second – in the future that could be the “new normal” says Maggie Zhou, managing director for Alibaba Australia and New Zealand.
“For us 11.11 is a rehearsal to get our infrastructure ready for the future,” Zhou said.
Australian brands fared well once again this year, ranking as the fourth highest selling country into China. However the event isn’t for the faint hearted or unprepared. Brands Which-50 spoke to highlighted the need for significant capital, strategic partners and planning to navigate the fast moving Chinese market.
Elizabeth Barbalich, CEO and founder of Antipodes, said the organic beauty brand was expecting to generate $6 million in sales this Singles’ Day, selling just three SKUs. But that result required a company-wide effort, including daily 30 minute scrums in the months leading up to the sale.
“We don’t see 11.11 in isolation. We treat it as part of the platform and what we are doing for the whole year,” Barbalich said.
Antipodes products are sold in 30 countries, but the New Zealand-based beauty brand began to focus heavily on the Chinese market four years ago when it noticed its products were popular with Daigou shoppers. Since then it has worked to build its brand with Chinese consumers located in mainland China and closer to home.
For 11.11 the company formed partnerships with two Chinese Key Opinion Leaders (KOLs) and, in the lead up to the sale, hosted activations at The Establishment in Sydney and Villa Maria in Auckland for Chinese Diagou, KOLs and influencers.
“So we are really focussing on China coming to us as well as us going to the Chinese market,” Barbalich said.
The business also has also hired 10 Chinese staff who work in Antipodes’ Wellington headquarters.
“To really understand the Chinese customer we have bought the Chinese customer in-house and that’s really, really key to our strategy to understand how they shop, how they behave and new product development.”
Online to Offline
Jessica Rudd, founder of Jessica’s Suitcase – an early Australian business selling on Tmall – is now on her fourth 11.11. A lot has changed in those years.
Rudd spent the end of last year in Shanghai and noticed the uptick in bricks and mortar stores participating in the shopping festival.
“One of the things I’ve noticed that was completely different from our first 11.11 was the way all of this was transitioning to offline. Suddenly we were seeing lots of bricks and mortar stores participating in this festival, trying to have a piece of it because it is really a trend: shoppers want bargains, not just online on that day but offline.”
“What this means is that for Australian brands, or any international brands, online has become the way segue offline into the China and that is crucial for a lot of the brands we work with.”
Jessica’s Suitcase, which is now owned by eCargo provides a channel for Australian brands to test the Chinese market by listing their products on the Jessica’s Suitcase Tmall store or venturing offline into supermarkets that eCargo has distribution agreements with.
Alibaba’s Hema supermarkets also provide a channel for businesses in its ecosystem to sell products in physical stores.
The Alibaba Ecosystem
Alastair Symington new CEO of Blackmores, a vitamin brand with a long history of working with Alibaba, said it was important for businesses to understand the wider Alibaba ecosystem.
“We talk about Chinese consumers, but there is really an opportunity for this ecosystem to exist in many, many markets.”
In particular Brazil, Southeast Asia and India were identified as potential markets Australian businesses could enter via the Alibaba platform.
Alibaba’s Maggie Zhou noted that Alibaba has set itself the goal of serving 2 billion people by 2036, half of those will be outside of China as the company continues its global expansion.
“Southeast Asia and India should be also one of the markets in the future that we can help Australian businesses step into,” she said.