Singles Day is now recognized as the biggest shopping event in the world. Although Singles Day is primarily a shopping event and sale that takes place in China, it has gradually become a global event that retailers everywhere are paying attention to.
The value of merchandise sold on Singles Day 2018 grew by 27%. It took less than 90 seconds for the first billion dollars of merchandise to be sold. Alibaba alone sold almost $31 billion worth of merchandise in a single day. Even the major US news networks all covered the most recent Singles Day, reinforcing how global this event has now become.
Alibaba started Singles Day and continue to be the brand that benefits most, but some of those gains are not as clearly visible as the headline revenue and sales figures. Many customers use credit cards and other financing methods to ensure they have enough cash available to snatch a bargain on Singles Day, but one subsidiary of Alibaba, Huabei, has been doing particularly well.
Huabei is an online lending platform that has become the lender of choice for the millennial generation. 86% of Huabei users were born in the 80s and 90s and 60% of them have never owned a credit card, so the service is tapping into a generation that may move beyond credit cards and into new forms of online credit from apps and other online providers.
38% of Huabei customers shopping on Singles Day chose to break their purchase into monthly installments lasting for one year. Conveniently this means that they can pay off their debt just before the next Singles Day and then they might be tempted to borrow once again, ensuring that Alibaba not only earns from increased sales, but also by financing the debt needed to make some of these purchases.
Alibaba also benefits from managing a huge proportion of the logistics created by so many millions of online orders. Alibaba’s Cainiao Smart Logistics Network says it has upgraded its technology to cope with the increased volumes in 2018; now they boast more than 30 million sqm of warehousing worldwide and a logistics field force of more than 3 million people.
Cainiao VP Ben Wang recently explained to Inside Retail Asia: “It was only five years ago that parcel orders surpassed 100 million for the first time. Back then it took nine days to deliver the first 100 million parcels. Last year, it took less than three days (2.8 days) to deliver the same number of parcels. Consumers increasingly want faster, better delivery, so that’s what we’re doing. This year, we’re striving to achieve a new high, leveraging the beauty of scale and technology.”
Singles Day is not just about a single day of huge sales in China. It can be seen as a microcosm of change in retail as an entire industry. Singles Day is changing how the logistics of delivering products is evolving and how customers finance their purchases too. Anyone with an interest in the future of retail might want to start exploring Singles Day 2019 not just for the bargains, but for the way in which this sale has become the centre of an enormous change in the way the retail industry functions.