It only took seven minutes for sales during this year’s Singles’ Day in China to hit $1 billion, and this year, the day is expected to hit a record breaking $20 billion in total sales.
The scale of the one-day shopping event, centered around Alibaba’s shopping platforms Tmall and Taobao, has been magnetic to fashion brands hoping to boost overall revenue and connect with the Asian consumer. (While it originated in China in 1999, it has since expanded to include Hong Kong, Taiwan and Macau as well.) Even though discounting products and participating in a day associated with frantic bargain shopping might oppose the ethos of luxury brands, Singles’ Day has simply become too big to resist.
In 2015, the total sales for the day hit $14 billion, topping the sales taking place on Black Friday in the U.S., which were $10 billion, and on Cyber Monday, which were $3 billion. For the fashion customer, Singles’ Day also has the benefit of being less concentrated around electronics and tech than Black Friday—it touches on basically every category for consumers. It also gives brands and retailers access to a coveted consumer demographic on a day when they’re looking to spend.
“China, in the past four years, has become a focus for luxury fashion brands,” said John Neilson, director of marketing at Clavis Insight, an e-commerce intelligence platform. “These brands are seeing that Chinese consumers engage en masse with e-commerce, and this is the gateway into that market.”
Brands and retailers including Michael Kors, Kate Spade, Coach, Calvin Klein, Lancome, Farfetch, Otte and Neiman Marcus are participating in Singles’ Day this year, discounting products as much as 60 percent off. The massive scale of the event, the importance of the Chinese luxury and mid-luxury customer to the industry (which is facing stalled growth rates of 1 to 2 percent through 2020) and the concentration of the sales taking place on mobile platforms like WeChat and Weibo have attracted these brands, and the rest of the luxury market will be watching.
Michael Kors, which first participated in Singles’ Day in 2015, is running a gamified campaign on WeChat for Singles’ Day, through which customers can play games of cards to win a promotional code to be used online or in stores. On its WeChat page, there will be a takeover of a Michael Kors-branded casino as well as imagery of its promoted handbags.
“It’s a strength when brands can connect a digital strategy to a content strategy,” said Neilson. “If they do that across WeChat, they’ll be ahead of the curve.”
This year, fashion is playing a bigger role during the day across the board. Dealmoon.com, a shopping recommendation site that has a customer base of six million Chinese Americans, reported that six of its largest fashion retail partners, including Neiman Marcus and Gilt, were participating in Singles’ Day promotions for the first time. Adding to this year’s focus on fashion is a shoppable runway show in Shanghai hosted by Alibaba, accompanied by virtual reality shopping experiences.
The shopping event is expected to continue to grow year over year, whereas Black Friday growth has slowed, according to the National Retail Federation. Yan Deng, an analyst at Profitero, said that the clientele involved in Singles’ Day — affluent, mid-luxury shoppers in China and cross-continental shoppers — holds higher regard than Black Friday. According to Deng, it’s a trade off: What brands may lose from discounting is made up for by the volume in sales.
If Singles’ Day proves to pay off for the initial brands jumping in, more and higher-end luxury brands could be joining in.
“Fashion is tiered. Brands like Coach aren’t super high-end, there’s another tier beyond them — the Gucci and other upper echelon brands,” said Neilson. “They’ll be watching quite closely to see what happens, and if they can discount significantly and maintain the perception of a luxury proposition.”