Singles Day, the world's largest shopping event, reveals the next wave of eCommerce evolution for brands in Australia. GroupM GM Commerce Sean Bone outlines three eCommerce lessons Australia can take from China.
November 11, 11:11 is the biggest global shopping event of the year. It dwarves Black Friday, Cyber Monday and Amazon’s Prime Day, but how many Australian brands have it marked in their calendar?
Fixating on US and UK eCommerce developments, we can often overlook trends coming out of China - the largest AND most dynamic eCommerce market, at 35% of online commerce GSV. Take Singles Day, started in 2009 by Alibaba and is now the world’s largest shopping event. While not an established fixture of the Australian retail calendar, derivations such as Click Frenzy increasingly are, and this eCommerce event is one you want to pay attention to. We will explore three key reasons why below, but first, what is Singles Day?
Initiated by Alibaba in 2009, it parlayed Singles Day (11/11 in China) into a discount-driven traffic-driving mega event which has since grown and diffused across multiple days, platforms and countries, blurring the line between shopping and entertainment. So how big of a deal are we talking about here?
AUSTRALIA WAS A TOP 5 SOURCE MARKET FOR SINGLES DAY 2020
Reaching A$180b in sales in 2020, Singles Day is 10x Amazon’s Prime Day, and bigger than the combined sales of Black Friday and Cyber Monday in the US. Alibaba’s Tmall captured A$100b (56%) of those sales. Not impressed yet? 800 million customers participated. Of 250,000 brands, 31,000 (12%) were international brands. Savvy Australian businesses, especially across vitamin, beauty and infant formula categories, drove Australia to become the 4th largest international source market for Singles Day.
Even with supply chain challenges, major regulatory interventions in China’s ecommerce market AND power disruptions, Singles Day 2021 is shaping up to set new records. For companies wanting to reach consumers across China and SouthEast Asia, it is obviously important, accounting for 5% of Alibaba Group’s annual sales. Does any of that matter if you’re focused on Australian retail? That’s easy: Yes.
There are three key signals we get from Singles Day which, like TikTok, are waves we can see coming well before they break onto Australian shores. Singles Day shows us:
- Social Commerce goes Live
- Balancing Scarcity and Availability
- Data-led Personalisation
SOCIAL COMMERCE GOES LIVE
Social Commerce, selling through social media channels and influencers, is entering a third generation. Having started with links through to brand pages or eCommerce sites, Social Commerce matured in size and sophistication, with second generation in-platform purchase integrated across the likes of Instagram Shopping and TikTok’s partnership with Shopify. Singles Day highlights the importance of the third generation of Social Commerce: Live Commerce, with sales-based social streaming now integrated in-platform for major retailers. It’s big - really big - and growing in China at an estimated A$480b in 2021, and already making a dent in the US at a more modest A$48b forecast for 2021.
Alibaba’s TaoBao Live clocked up A$10B in sales in the first 30 minutes of pre-sales during last year's Singles Day. Viya, an influencer and commercial powerhouse in China, live-streamed to 149 million viewers over the two day sale, with her viewers spending over $700m on products she promoted. With Live Commerce seeing conversion rates in the 30% range, retailers in the US have taken notice. Amazon Live launched in 2019, Walmart Live in 2021 and YouTube Live kick off Holiday Stream and Shop on November 15th.
While Australia is yet to see a major retailer adopt Live commerce, second generation Social Commerce is alive and thriving. A significant portion of shopping has always been tied to social engagement and entertainment and Live Commerce powerfully weaves them together. It will arrive in Australia. Whether you’re on the sidelines today, or dabbling in first or second generation Social Commerce, it’s time to start thinking about the who and how as you solve social and emotional needs, not just functional ones. And which Content Creators or Key Opinion Leaders can help brands safely and authentically connect with audiences.
SCARCITY VERSUS AVAILABILITY
With short, intensely competitive sales windows, events like Singles Day demand focus on Commercial fundamentals. Are content and listings live for the Limited Edition products that help drive traffic? Availability and fulfillment make or break success: monitor inventory and availability daily, retail channel. Demand and delivery spikes can be partially mitigated with pre-sales that inform inventory builds and forward positioing. Fulfilment continues to evolve with growing use of same day or same hour offerings. During the earlier 618 Sales Event, Tmall delivered 95% of orders within 24 hours, only possible with forward positioning.
Ad buys linked to product inventory, and reserve budgets allow agility mid-event. Monitoring stock risks allows for the diversion of traffic to secondary offers. Avoiding outright stocks outs is especially important on platforms such as Amazon where they trigger enduring setbacks to search performance. A reserve budget allows you to quickly take advantage of competitive stock outs, often at a lower CPC or CAC.
DATA-LED PERSONALISATION
While eCommerce once heralded the ‘endless aisle’ and Amazon’s ‘everything store’, it turns out that no one wants endless choices. We want better choices. The ability to serve up infinite permutations of ad and products risks making you about as much fun to be around as the person at the party who always talks and never listens. Personal relevance is key and yet one-to-one personalisation does not scale. Mass personalisation does scale, just look at TikTok’s interest graph and the power of their For You Page as a benchmark for personalisation. Scalable, data-led personalisation (yes, AI) will be crucial as Shoppable Media goes through rapid growth and transformation, over the next two years.
Create value for your Customers and Shoppers - at scale - by combining data sets to serve up highly relevant, addressable ads and products. Not only with your ROI thank you, the user experience will reduce expensive channel and product churn. We’ve seen addressable content approaches, drawing on the power of data-led insights, boost overall campaign performance by 15-35%.
Singles Day and derivations such as Click Frenzy will grow and diffuse as retailers compete and pre-empt each other, vying for a greater share of peak spending periods. More important than the events themselves are the trends and currents that Singles Day reveals about the next wave of eCommerce evolution we can expect in Australia.