Kantar Worldpanel - www.kantarworldpanel.com

Why brands should pay attention to Singlesí Day

29/11/2016

Singles’ Day is the world’s largest shopping day, last year it netted $14.3bn which is more than double that of the US-driven Black Friday and Cyber Monday combined. Traditionally online shopping festivals such as this are seen as a time when shoppers stock up on consumer durable goods such as TVs and audio equipment, but the Singles Day event has become so significant it now covers all categories.

Currently 4.2% of China’s FMCG spend is online, we forecast that this will rise to 15% by 2025 and be worth $36bn. To put this into context, globally 4% of FMCG spend is online and this is forecast to rise to 9% in the same period at a value of $150bn.

While Singles’ Day is important for all brands, it’s a particularly valuable event for brands looking to enter the Chinese market for the first time. Many international brands are now capitalizing on the opportunity to enter the market with a bang.

There is no doubt that Singles’ Day drives more people to shop online for FMCG goods. In 2009, the year that the event started with just 27 merchants, online penetration for the category was 7.7% and by 2015 it had risen to 16%, we predict a rise to over 20% in 2016. Although the growth of online is partially at the expense of offline, some of it is genuinely new sales, representing growth for the sector.

Whist usually in retail things go from offline to online, Singles’ Day is the reverse. What started as a purely online festival has now gone offline as traditional retailers such as Wal Mart and Vanguard start their promotions early with a focus on the 11/11 event.

What is interesting this year is that the impact of Singles’ Day has moved beyond being a day for retailers and has become a way for brands to promote themselves. Activity for the day itself now starts a full month early with levels of preparation and investment that rival the Super Bowl.

More prestige brands are now launching on TMall during the event and all the big manufacturers like P&G, Unilever and Schwarzkopf have campaigns to promote their bestsellers in large pack size on their Tmall stores. JD.com also created a “Personal Care Special Day” with 50% off on personal care products for spends over 199RMB.

As might be expected, the stock-up effect of Single’s Day is a factor for FMCG brands, particularly for those which can be easily stockpiled. In last year’s event, 30% of the goods purchased were babycare and 22% personal care and we see a definite peak for hair and oral care products.

In a survey conducted in late-October by CTR and Kantar, food at 23% was the second biggest category that shoppers intend to buy in 2016. At last year’s event food sales were driven by dairy, particularly UHT which also plays to the stock-up mission.

In line with last year, it looks like mobile will again be the dominant category for purchasing. When asked to list the ways they intended to shop during the Festival, 44% of respondents said that it would be through a mobile app (not including WeChat), with a further 8% citing WeChat specifically and 16% saying that they would use a mobile platform. Laptops and PCs are still expected to be used, but only 37% of respondents suggested this.

The next step for Singles’ Day is going global. This year there are pilots in Taiwan and Hong Kong with activity in South East Asia through Alibaba’s acquisitions planned for next year. But if Alibaba founder Jack Ma is to be believed, 2 billion consumers globally will be shopping on the Alibaba platform in the next 10 years. And that is a market size no brand or retailer can afford to ignore.

Why brands should pay attention to Singlesí Day

Why brands should pay attention to Singlesí Day

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Jason Yu
General Manager

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