Foreign Companies Want to Be Single,Too

By+Hou+Beibei

In what is likely the most expensive televi- sion advertisement for Singles Day since the shopping festival was founded in 2009， American actor Kevin Spacey—appearing as his character U.S. President Frank Underwood from House of Cards—wished the audience a happy Singles Day and listed the number of items he wanted to buy to celebrate.

Singles Day， or Double 11， falls on November 11 every year and is Chinas equivalent of Cyber Monday in the United States， though it dwarfs its American counterpart. Chinese e-commerce giant Alibaba broke its own record this year， recording $14.3 billion in sales over the 24-hour period.

As the shopping festival has grown in popularity each year， so have the promotion campaigns and advertisements from Chinas leading companies， which usually begin about a month before the holiday. But its not just domestic companies looking to get in on the action. Foreign companies are increasingly opening their own stores on Chinese ecommerce sites as demand for foreign goods continues to burgeon in the country.

This helps explain why Alibaba chose Spacey to appear on its television show on November 10 to kick off the shopping spree. American products are as popular in China as its film stars， movies and television series. Costcos online store on Alibabas Tmall had presale volume exceeding 10 million yuan （$1.6 million）， according to data released on November 6 by Tmall Global， Alibabas cross-border e-commerce platform. The American superstore sold more than 20 million yuan （$3.14 million） worth of good in just one hour on Singles Day， ranking it first among foreign brands on Tmall Global， according to the platforms general manager Liu Peng.

Global shopping

Singles Day surpassed Cyber Monday in 2012 to become the worlds biggest online shopping day. Some foreign firms， including Costco， opened stores on Tmall to cash in on the holiday.

“Our performance on Singles Day shocked and surprised our management， and it totally transformed our annual business plan，” Costco said in a statement after last years Singles Day. The superstore opened its Tmall store last October and sold $3.5 million worth of goods on Singles Day last year.

Its performance didnt go unnoticed. More foreign brands are flocking to e-commerce sites to capitalize on Chinese consumers growing desire for foreign products. Alibaba has been selling its platform as a way for foreign companies to reach domestic consumers. More than 5，000 international brands from 25 countries and regions attended Tmalls Global Singles Day promotion event this year， according to an Alibaba release.

At the launching ceremony of 2015 Tmall 11.11 Global Shopping Festival on October 13， Alibaba Chairman and founder Jack Ma outlined the companys Double 11 promotion strategy in English to an audience comprised of diplomats from 39 countries and representatives from more than 70 partnering international brands and trade associations.

“There are currently 300 million members of the middle class in China， and that number will rise to 500 million in 10 to 15 years. Chinas consumption power will rise quickly， and that will not only drive Chinas economy but also the worlds economy，” Ma said at the ceremony.

Alibaba isnt alone in seeing demand. Its major rival， JD.com， launched its cross-border platform JD Worldwide last April and its first logistic base for cross-border e-commerce in October in Guangzhou， capital of south Chinas Guangdong Province.

JD.com said consumers had placed more than 32 million orders on its online marketplace on November 11， up 130 percent compared with last years Singles Day. The number of orders on JD Worldwide that day rose by 366 percent compared with Octobers average daily figure， with orders for maternal and baby products growing more than 10 times.

Online-to-offline

Singles Day hasnt just changed how foreign companies look to enter the market. More Chinese retailers are launching online-tooffline （O2O） platforms to survive increasingly fierce competition over the holiday as Chinese consumers habits shift to buying online using mobile apps.

Intime Retail， one of Chinas leading department stores， has been working with Alibaba since 2013 to provide more offline services to its customers. Consumers pay for their orders online on the Intime flagship store on Tmall after selecting the products in the offline store. Sales volume of Intime flagship store on Tmall tripled last years volume to reach 20 million yuan （$3.14 million） in nine hours on November 11 and rose to 28 million yuan （$4.4 million） in 15 hours.

In March 2014， Alibaba invested about$692 million in Intime Retail in exchange for 25 percent equity interest in the company. Alibaba became the controlling shareholder after former Intime Chairman Shen Guojun transferred his shares in July 2015.

“The future economy will be a combination of the real economy and the digital economy，”said Zhang Yong， CEO of Alibaba Group and Chairman of Intime Retail， at a press conference in July. He announced that Alibaba will take advantage of big data to improve Intimes services for consumers and delivery system of goods.“We hope new Intime with Alibabas edge on Internet can create more opportunities for O2O businesses and play a key role in Alibabas ecommerce operation，” he said.

More than 1，000 merchants have joined Tmalls O2O promotion campaign， including retailers specializing in clothes， cosmetics， electronics， automobiles， furniture and tourism. The offline stores provide customization， distribution and after-sale services to online shoppers.

Seven-year itch

But even as companies upgrade their services to meet Singles Day demand， customers are growing weary of the constant promotion and billboards advertising goods.

Wang Chen， an employee at a foreign company operating in Beijing， passed billboards advertising the shopping holiday in subways stations and on bus stops every day for nearly a month before November 11.

“Now there are various promotion events hosted by e-commerce platforms in a whole year， ranging from holidays to the manufactured shopping festivals， such as May 20， June 18 and Double 12 （December 12），” Wang said.“These events also offer irresistible discounts. Its unnecessary to rush to buy on Singles Day. Im a little tired of the overwhelming promotion advertisements.”

For the past six years， Singles Day has developed the online shopping habit of Chinas youth. With consumers becoming savvier and the e-commerce market becoming more mature， Singles Day may soon hit its pinnacle in per customer spending.

In a survey from Renren.com， a social network site targeting Chinese college students， 65.9 percent of respondents born in the 1990s said they dont splurge on Singles Day. Instead， they only buy goods that fit their actual needs.

And for foreign companies looking to gain more profits on Singles Day， it will take more time before most Chinese consumers are familiar with all overseas brands and products.

“The transaction volumes of cross-border e-commerce during Singles Day mainly rely on maternal and baby commodities， cosmetics and health foods， which are simple substitutes for Chinese goods，” Zeng Bibo， a column author for e-commerce news website Ebrun.com， wrote in an article.

He estimates that the transaction volumes of Tmall Global will occupy less than 3 percent of Tmalls total volume.