For online shoppers, 11.11 has become a shopping phenomenon. The biggest online sales event of the year in China is co-opted by ecommerce giant Alibaba, where discounts from participating sellers range from 25% – 70% off, and a record $5 billion of products were sold in under 90 minutes last year.
The company, which owns online marketplaces Tmall and Taobao sold $14.3 billion worth of goods during the sales period last year, targeting 386 million annual active buyers – a number greater than the US’s general population.
According to Fortune, the campaign is quite accurately labelled “Black Friday on steroids”.
The combined earnings of Black Friday and Cyber Monday, North America’s famous sales period, amounted to $7.54 billion last year, and while impressive, only amounts to half of Alibaba’s earnings in the same sales period.
11.11 Cultural Backstory
Singles’ Day originated in Nanjing University in 1993 where groups of young single friends would get together and celebrate their unattached status by shopping. In 2009, Jack Ma, chairman of Alibaba Group, saw an untapped opportunity and created an online shopping event around young peoples’ behavior, framing it as a day of personal indulgence.
‘Singles’ day’ was made famous and monetized by Alibaba, turning the obscure day into an online shopping extravaganza on its online marketplaces and boosting business during China’s slack period between October’s Golden Week and Lunar New Year in January to February. It was also introduced around the time ecommerce exploded in China, leading to a 5,740% growth in Alibaba’s “Double 11” sales event between 2009 and 2013.
The company has since trademarked the term in December 2012, meaning that it can take legal action against media outlets that accept advertising from competitors who specifically use this term.
11.11 sales also reach hundreds of millions of Chinese shoppers beyond large cities such as Beijing and Shanghai, who rely on Alibaba’s Taobao and Tmall because they are without big shopping malls in their towns.
The event’s offline marketing impact also contributes to 11.11 success thanks to appearances from global celebrities such as Daniel Craig and Kevin Spacey for the launch event, which has been the company’s way of turning the shopping extravaganza into a sort of event to be celebrated.
For the first time since the launch of 11.11 campaign, Alibaba Group has announced that this year’s campaign will last for 24 days instead of 24 hours. It will also mark the first introduction of Alibaba’s virtual reality technology, Buy+ , which promises to transport shoppers to retail stores overseas through a VR headset. This year will also see the expansion of 11.11 to Hong Kong and Taiwan.
Alibaba’s 11.11 success means it comes as no surprise that Southeast Asia has followed in the footsteps of China. Despite it not being a day to celebrate single-hood, large online marketplaces have each adopted their own customized versions of Alibaba’s 11.11 campaign such as Lazada and Moxy (now known as Orami).
Online players are under pressure to perform and participate during this period as bigger brands and retailers begin offering better sales and greater discounts thanks to deeper pockets and larger number of merchants.
In Southeast Asia, marketplaces are using their big 11.11 spin-offs as a litmus test of how well they’re performing against competitors in local markets.
How Southeast Asia makes 11.11 their own
From hiring more manpower to ensuring that shoppers are well aware of the sales event, marketplaces push out social media strategies months before the actual sales event and calculate stock predictions to ensure the region’s largest sales event is a success. Here are how Southeast Asia’s biggest players successfully take advantage of the 11.11 buzz:
Marketing blitz: Social personalization is key
As the largest ecommerce marketplace in the region, Lazada has adapted 11.11 by extending it with their very own 12.12 event on December 12th and coining it ‘The Online Revolution’, which started in 2012.
Lazada Thailand has seen a rise in their gross merchandise value (GMV), chalking up $40 million during 10th-12th of December 2015 and reflecting a gradual increase in participation from consumers.
Lazada Thailand saw a 300% increase in orders when compared to 2014.
“In Thailand, we notice that successful marketing channels are very social,” says Baptiste Le Gal, CMO at Lazada Thailand. “Customer relations management is the key channel to reach out to customers with personalized offers that match their interests.”
The consumer trend has shifted slightly in Thailand. Baptiste noted that electronic goods used to reign as the top selling category, but now more lifestyle centric segments such as health&beauty and home&living are moving faster on the platform.
Thailand’s high mobile adoption is also contributing to how consumers shop on Lazada.
“Mobile transactions accounted for 70% of the 400,000 items ordered during Lazada’s online festival last year,” commented Baptiste.
The mobile first market means that Lazada is focusing on the mobile aspects of its channels, and ensuring that Lazada’s mobile app is optimized for the best customer experience during the campaign period. The marketplace has also launched an advert, ‘make your dreams come true‘ in Singapore, gearing shoppers up for the big event.
Zalora, Rocket Internet’s fashion portal, also follows the Rocket formula by offering sales up to 80% off for both 11.11 and 12.12. Zalora Indonesia’s marketing strategy promotes online campaigns from October until the grand finale of 12.12, starting with Zalora Great Sale currently ongoing now, which shoppers can treat as a warm up to the main event.
“In 2015, overall sales for 12.12 increased by 30 times more than an average day, with participating brands seeing a drastic increase in sales even after the campaign was over,” says Priyanto Lim, Head of Marketplace at Zalora Indonesia.
But slapping big discounts on jeans and jackets isn’t enough. Zalora Indonesia also holds online competitions, provides extra giveaways and uses celebrity endorsements on social media as part of the big push to generate buzz around the sales event. Essentially, every customer facing channel is jam-packed with purchase incentives and triggers to drive sales.
It appears that speculations of brands feeling pressured to participate and make deliberate cost cuts to compete with other merchants don’t hinder the impact of the campaigns.
“Contrary to what articles suggest, brands are very willing to partner with us as they benefit from the extra traffic,” Priyanto adds.
Female centric marketplace Orami is focusing on curating original ‘Singles’ Day’ themed content and community to drive traffic to the site and engage shoppers rather than launch a big promotional campaign.
“To drive social media engagement, Orami will also use Facebook as a tool to create engagement with users through online games related to Singles Day,” says Shannon Kalayanamitr, co-founder and CMO of Orami.
Targeting a mobile centric region
Shopee, Garena’s mobile shopping platform, released its own version of the mega sale for the first time this year, coining it 9.9 on September 9th. Benefiting from a fast accelerating mobile market in the region, the platform targeted Thailand’s mobile first shoppers by progressively releasing specially marked down products throughout the day to keep shoppers anxiously clutching their mobile phones.
Shopee’s website even publishes a discount schedule ahead of time so shoppers can set up an alarm for the product they’re eyeing, creating a ‘ready-set-go’ mentality for shoppers to encourage competitiveness and in turn, more shopping.
Niche service providers jumping on the bandwagon
11.11 has also inspired online service providers in Southeast Asia to cash in on the online flurry.
Groceries on demand service provider, HappyFresh Indonesia, offered up to 30% off its most popular products in its marketing campaign last year.
And a recent addition to the online grocery scene in Thailand, honestbee, is currently working with popular Thai supermarket chain Villa Market to tap into the ‘necessary goods’ sector that includes everyday items such as water, fresh food and meat. These items will all be a part of the delivery service’s big sale campaign.
When groceries go on sale, shoppers tend to ‘stock up‘, especially when purchasing online as the selection is wider.
“We look at the purchase patterns of our customers to see what kinds of items are popular among shoppers. For example, customers in residential areas often order large volumes of mineral water and fresh fruit so we have to anticipate that these orders may spike during our 11.11 campaign,” said Piyawat Laiphithak, Marketing Manager at honestbee, Thailand.
honestbee is also playing directly on China’s ‘Singles Day’ gimmick as they plan to give away snacks such as gummy bears and popcorn for shoppers.
11.11 Logistics: What happens behind the scenes?
The phrase “it takes a village to raise a child” is fitting here, if we swap the child for a large scale online campaign. How do ecommerce companies ensure optimal functioning during this hectic time?
For ecommerce solutions provider aCommerce, the company plans approximately two months ahead to accommodate the spike in orders for clients that participate in the sales event.
“We increase our manpower by three times through temporary contracts and run 24-hour operations during spike times such as 11.11 to ensure customer demands are tended to,” says Phensiri Sathianvongnusar, COO at aCommerce Thailand.
The temporary staff are hired through an agency and receive 2-3 days of training for their specific tasks prior to the sales event.
During the spike period, aCommerce also uses its multi-shipping platform to tap into over 20 courier networks to ensure that deliveries are made on time, for the best rate and no order gets dropped, as time and speed are the most crucial things during the campaign period.
“Inventory planning is crucial to campaigns such as 11.11 and 12.12, so we use historical data from previous years’ events to determine what types of products tend to be popular during big sales and avoid stock shortage,” adds Phensiri.
For brands that are not participating in the 11.11 campaign, they are part of the express line which ensures that their products still remain a priority during the campaign period.
A league of our own
Using China’s 11.11 as a backdrop, Southeast Asia’s online marketplaces are carving out their own versions of the mega-sale but they cannot simply replicate Alibaba to find success.
Southeast Asia can potentially leapfrog China with the region’s explosive mobile growth and gaining middle-class. Big campaigns such as 11.11 can only grow in success every year as more consumers move online. Mobile first platforms such as Shopee are already moving fast and capturing the surging mobile market in Southeast Asia, mirroring the rise of mobile shopping in China, where 72% of purchases during last year’s 11.11 came from mobile.
The positive reception and the duration of the campaigns is a testament to the region’s growing appetite for ecommerce, perhaps an indication that we are positively inching away from China’s shadow.
By Anutra Chatikavanij