Retailers and brands have been fiercely competing for customers’ wallet share with enormous discounts, entertaining livestream e-commerce, and innovative strategies during China’s Singles Day (also known as “Double 11”) festival, an annual shopping event that was created by Alibaba in 2009 to celebrate those not in a relationship.
Historically, Singles Day sales total more than Black Friday and Cyber Monday sales combined. Bain & Company estimated that the total gross merchandise value for last year’s Double 11 festival topped $140 billion, while Adobe Analytics reported U.S. consumers spent $35.3 billion online during the week of Thanksgiving, Black Friday, and Cyber Monday in 2022.
Consumers in China Are Spending Mindfully Amid Slowing Economic Growth
With uncertain economic conditions, consumers in China are spending more cautiously and conservatively this year. More than three-quarters (77%) of Singles Day shoppers plan to spend less or maintain spending at 2022 levels, a Bain survey found. The Double 11 retail extravaganza’s relative attraction has also declined over the years, which is likely due to more promotions being offered throughout the year. Only 53% of consumers reported they were excited by Singles Day, compared with 76% in 2021.
Some consumers are hunting for the best deals, while others are shopping for experiences and health and lifestyle products. Several retailers developed catchy slogans to promote sales, including Alibaba’s “Double 11, Low Price Everyday,” JD.com’s “Truly Cheap,” and Pinduoduo’s “Truly Low Price Every Day.” Spending is down on fast moving consumer products, such as food and beverage, and large durables which are closely tied to the property sector, according to WPIC Marketing + Technologies.
Higher income consumers are generally still spending, especially on categories like athletic apparel, personal wellness, pet care, and luxury products. Brands like Lululemon, Nike, and Starbucks are reporting soaring revenues. More than 200 luxury brands joined Tmall’s Double 11 festivities, including Gucci for the first time. The five major luxury giants, LVMH, Richemont, Kering, Hermès, and Chanel, have collectively released 100,000 new products, including limited edition items, co-branded models, and highly collectible, out-of-stock pieces. Some luxury brands are also offering other perks, such as financing options. Gucci and Burberry offer a 24-month interest-free installment payment plan.
The Rise of Live Commerce
In addition to steep discounts, retailers are trying to capitalize on the livestream commerce trend by combining shopping and entertainment during this year’s Singles Day. Livestream shopping started on social media in China and has grown into a $521 billion market, according to Coresight Research. The trend involves a seller broadcasting live video of themselves showing and explaining products while viewers ask questions and make purchases in real time. Imagine a real-time, interactive social version of QVC where every influencer can channel their inner Billy Mays.
Alibaba launched its livestream app Taoboa Live in 2016, and sales skyrocketed during the COVID-19 pandemic lockdowns. Within the first 30 minutes of Singles’ Day 2020, Taobao livestreams generated $7.5 billion in transactions. Douyin (the Chinese version of TikTok) has also become a major social commerce platform.
Livestream commerce has not taken off in the United States. While nearly three-quarters (74%) of Chinese consumers said they have bought products through a shoppable livestream in 2022, 78% of U.S said they have never even watched one. Some retail outlets, including Amazon, eBay, Poshmark, Shopify, TikTok, Walmart, and YouTube have been trialing and introducing livestream commerce capabilities.
Amazon launched its Amazon Live platform, which allows influencers to pitch products live from their own homes. Viewers can react with emojis and ask questions that the host can answer live. Each product has an embedded link to streamline purchases.
Best Buy partnered with TalkShopLive to host a three-part 2023 holiday livestream shopping series. Viewers will be able to take advantage of limited-time deals during each show, ask questions about the products, and add items to their cart live by clicking a “buy” button in the video.
With the holidays just around the corner, U.S. retailers are employing traditional and new innovative tactics to attract the most shoppers leading up to Black Friday and Cyber Monday.
