Analysis: Should UK retailers launch their own Singles' Day?

Alibaba’s Singles’ Day will take place this weekend on November 11.

The shopping festival has become the largest offline and online shopping day in the world, and is expected to break record sales and generate £23bn in sales this year, up approximately 20% from the record figures in 2017.

What began as an ‘anti-Valentine’ celebration for single people in China in the 1990s shot to prominence in 2009 when Chinese ecommerce giant Alibaba began using it to promote retailer discounts on its Tmall platform.

“It’s a manmade shopping bonanza which exists outside of any other promotional calendar and encourages people to open their wallets”

David Roth, The Store WPP

Chief executive of The Store WPP, David Roth, said: “Jack Ma [Alibaba’s founder] heard of it, and being the marketer and showman, he embraced it and made it famous.

“For the first two years he reached out to his supplier base and persuaded them to give big discounts and that was what gave it momentum. Today, if you want to play you have to give real discounts which will resonate with shoppers.”

When Alibaba launched its first Singles’ Day, 27 brands participated – that number has rocketed to more than 180,000.

“What is so impressive about it is how it has created its own space and momentum – it’s a manmade shopping bonanza which exists outside of any other promotional calendar and encourages people to open their wallets at a time when they otherwise wouldn’t have thought to” says Roth.

Copying a phenomenon

As well as offering deals across TMall, about 200,000 Alibaba tech-enabled ’smart stores’ across China will drive sales offline as well as online.

Singles’ Day will also take place for shoppers in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam – and it has inspired other retailers to launch their own version of the event.

Consultancy Tofugear analyst Tiffany Lung says the day has spawned equivalents for other ecommerce operators including JD.com’s 6.18 (June 18), Jumei’s 3.1 (March 1), Suning’s 8.18 (August 18) and Vipshop’s 128 (December 8), and even in other Asian marketplaces such as Singapore’s Shoppee 9.9 (September 9) and Korea’s 11Street Love 11 (11th of every month).

“Despite Singles’ Day being so affiliated with Alibaba, it has become such a phenomenon that other retailers, including competitors, host the same shopping day on their platform and offering low deals and promotions which consumers expect. However, Tmall signed on exclusive contracts with retailers allowing them to only sell on Tmall during this time of the year,” says Lung.

The trajectory of Singles’ Day has caught the eye of retail’s most formidable operator Amazon, which took a leaf out of the Chinese etailer’s book with the launch of Prime Day three years ago.

The day – which actually runs for 36 hours – offers deals to those who are subscribers to next-day delivery service Amazon Prime.

Prime Day, which took place on July 16 this year, is a huge sales event for the retailer – it was even bigger than Black Friday in 2017.

According to web traffic monitor Hitwise, 89 million visits were logged on Amazon and one in every 20 UK web visits went to Amazon.co.uk.

It ended up as the company’s biggest sales event to date, reeling in an estimated $3.5bn (£4.6billion).

Controlling your destiny

The trend of rubberstamping a day in the retail calendar to drive sales has proved a success for some of the world’ most successful retailers – so why haven’t the UK’s pre-eminent players gotten in on the action yet?

Roth says he can understand why UK retailers might be sceptical about launching their Prime or Singles’ Day equivalent.

“I think there’s a certain sense of being careful what you wish for – you could sell a lot but you put a hell of a strain on your infrastructure and it’s not the most profitable sales you’ll ever have, so there is justifiable caution.

“That said, there is something to be said for taking control of your own destiny. I like that Singles’ Day is manmade and self-created and there’s no denying that it was a big bet, which now adds real value for the retailer, the brands and the customers alike.

“Mostly impressively, Alibaba own it themselves rather than following the herd.”

“It’s a pretty tough one to pull off when you’d be up against all these events like Christmas and Black Friday”

Martin Newman, Practicology

Practicology chair Martin Newman says while Singles’ Day is an undeniable success, it’s not a feat that many retailers could pull off.

“For Amazon to have their own equivalent of Singles’ Day with Prime Day makes sense because of the breadth of their offer, especially since it makes signing up to their membership scheme essential,” he says.

“But you’d have to really think about the relevance of it and make it a more compelling event than what’s already in the UK retail calendar in order to give it actual traction, which is no mean feat.

“It would be a nice idea but it’s a pretty tough one to pull off when you’d be up against all these events like Christmas and Black Friday, which are well defined and part of the consumer calendar already, at a time when shoppers are spending less on retail and more on experience.”

GlobalData’s UK retail research director Patrick O’Brien concurs.

“There’s always some occasion trying to vie for our attention as consumers, so it’s very hard to see how a retailer could galvanise people into something which led to significant spend without discounting,” he says.

“There’s too much discounting already so I can’t see retailers wanting to get involved in kick-starting their own equivalent.”

However, Roth believes that for retailers with sufficient scale and scope of products, such as Sainsbury’s-Argos, launching a standalone sales event could have real potential.

“Singles’ Day in China is a phenomenon that is powered by real customer excitement, which surpasses just discounting and reverberates through the whole consumer ecosystem,” he says.

“You can’t do it half-arsed and you do have to really commit, but if you could pull it off it would be a really brave, bold move at a time in the UK when I don’t see retailers making many.”