An exploration of the luxury market through trends, insights and expert opinions
With China's recent Singles Day winning over $30bn in sales, can Western brands maximise on this unstoppable shopping event? James Hebbert, managing director of Hylink, shares his advice.
UK brands including Dyson and Jaguar-Land Rover were among those that earned the sixth biggest slice of sales in 2018
Singles Day, led by e-commerce giant Alibaba, has taken place on the 11th November for the past 10 years. This year it earned the company over $30bn in sales (£23.8bn, €27.3) – roughly equivalent to Canada’s annual e-commerce spend – making it the world’s largest shopping festival by far. Black Friday and Cyber Monday pale in comparison. Yet, little is still known about the festival among Western brands and retailers.
Despite Singles Day growth slowing for Alibaba, increasing by 27% in 2018 compared to 39% in 2017, there is still major growth year-on-year. This is largely due to China’s thriving middle-class which, according to an OECD forecast, is expected to almost triple from 300 million to 850 million by 2030. Millennials make up a large proportion of this. In fact, China’s total population is made up of 400 million millennials. Since this group are typically the most engaged with other online shopping events, it can be expected that Singles Day will break record sales again next year.
When creating a buzz around Singles Day, Alibaba doesn’t do things by halves. This year, we saw the company launch a mini satellite to broadcast sentimental messages to shoppers from space. Next year, we can expect more gimmicks from Alibaba, enhancing the customer experience of the festival and positioning the brand as dynamic and forward-thinking.
If UK brands are unable to innovate at the same pace, they will face an uphill struggle in the Chinese market.
So what are the opportunities for Western brands to break into Singles Day? Certainly there is space for them to participate. In fact, UK-based brands including Dyson, Burberry and Jaguar-Land Rover this year earned the sixth biggest slice of sales according to Alibaba – but, as brands such as M&S and Topshop have found – entering China is no easy feat. As the middle-class grows, so does competition in the market. Brands using social media sites such as WeChat have experienced a decline in consumer engagement as the market becomes increasingly saturated. In order to break through the noise, brands require a bespoke, considered marketing strategy that resonates with Chinese consumers.
A mistake that UK brands often make is assuming that Chinese shoppers are looking for cheap or entry-level products, but that stereotype no longer holds. In fact, Chinese consumers are as sophisticated as the West, if not more so when it comes to using digital platforms. As a result, Chinese brands are way ahead in terms of technology and digital innovation, and these shopping experiences – be it online-to-offline (O2O) commerce or retail storefronts on Alibaba's Tmall platform – have become normal for Chinese consumers. If UK brands do not take this into consideration, and if they aren't able to innovate at the same pace, they will face an uphill struggle in the Chinese market.
Ultimately, while the Chinese market is incredibly enticing for UK brands, success will not come easy. Brands would be naïve to think that it is as simple as listing and selling items in line with Singles Day. It is crucial to map out a long-term, digitally-focused marketing strategy unique to the Chinese consumer. If they can nail this, there is opportunity to prosper in the Chinese market, perhaps even in time for Singles Day 2019.
James Hebbert is UK managing director of Chinese and UK creative digital marketing and media agency Hylink.
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