Chinese retail giant Alibaba is predicting global sales from this Saturday’s Singles’ Day sales event will be more than 10 times that of Australia’s total Boxing Day sales in 2016, and retail experts say there’s only one path for Australian businesses: get involved or lose out.
The annual retail event, which runs on November 11 each year and was launched by Jack Ma’s Alibaba to tap into the trend of Chinese university students celebrating their single status on this day, typically rakes in billions of dollars within the first hour of trade.
Alibaba says it is aiming to beat $US23.3 billion ($30.4 billion) in sales this year, reports the South China Morning Post, dwarfing the $2.3 billion in sales over 2016’s Boxing Day sales period.
This time last year Prime Minister Malcolm Turnbull was inking a deal with Jack Ma to help more Australian retailers get onto its sales platforms like TMall, and retail experts said at the time Aussie brands needed to take a long-term approach to marketing in China if they were ever to see solid sales from events like Singles’ Day.
As the Australian retail landscape holds its breath for a potential launch of the Amazon platform in coming weeks, retail analysts say local players now have little choice but to roll out strategies to take advantage of the massive opportunities on offer from events like Singles’ Day.
Some local retailers, like homegrown beauty subscription service Bellabox, have already incorporated Singles’ Day into their calendar; in 2015, Bellabox co-founder Sarah Hamilton told SmartCompany Singles’ Day led to a 200% uplift in sales for the brand.
“It is a massive opportunity for retailers, because on the one hand it is an online opportunity for Australian SMEs to tap into this as a way of getting their brands noticed in mainland China,” associate professor at Queensland University of Technology Business School Gary Mortimer tells SmartCompany.
However, Mortimer believes there is also real scope to leverage events like Singles’ Day in Australia in the future, given there is a large population of Chinese Australians, and the sale event presents a very different retail mindset to the likes of Boxing Day.
“With traditional sales, end of year sales, the tend to be all about the sale price,” Mortimer observes.
In a climate where Australian businesses are concerned about retail spending, there is scope for Australian retailers to leverage the Singles’ Day concept in future to encourage shoppers to spend big.
“The motive for Singles’ Day is all about self-gifting, about rewarding yourself for hard work and sacrifice,” he says.
Unlike sales like the Boxing Day campaigns, it is not an event aimed at lowering prices to remove remaining stock.
“Singles’ Day is a really interesting way retailers can move the motive away from deep discounting towards the idea of reward.”
Australian retailers have no shortage of online global sales events to jump on, either: after Singles’ Day is complete, brands have a chance to cash in on the Black Friday and Cyber Monday Thanksgiving sales campaigns.
Retailers reported to SmartCompany last year Australian shoppers had started to catching onto and expect deals through the US-centred sales event.
“Last year I think we saw a bigger trend of fast fashion brands jumping on board, and I think there’s definitely a bit more hype this year,” homewares business Hunting for George said last November.
However, the volume of global sales opportunities in the lead-up to Christmas has lead some analysts to suggest maintaining enthusiasm among Australian shoppers will be a challenge.
“While consumers are still very much interested with these sales events, the sheer number organised throughout the year has watered down much of the market’s vigour and consumers’ excitement,” Euromonitor International senior research analyst Hianyang Chan says.
Mortimer says there are plenty of channels available for Australian brands wanting to reach international markets, rather than capturing new Aussie customers.
“It’s an online phenomenon, and you can choose to go through something like Alibaba, or things like the [Australian daigou company] AUMake.”
Meanwhile, the Australian retail world braces for the launch of online retail giant Amazon, which is expected to be up and running in the local market by Christmas.
Some of the first local retailers to use Amazon Marketplace revealed themselves this week, with Costumes.com.au and shoe retailer Styletread telling Internet Retailing they are ready for action, while hundreds of local suppliers are tipped to attend a merchant event with the global retailer next week.
“If they help grow e-commerce in general, this will be a good thing for e-commerce businesses that are good operators,” Costumes.com.au co-founder Huppatz said of the decision to work with Amazon.
Earlier this year, Huppatz told SmartCompany the costumes retailer had also signed up to Australia Post’s free delivery program Shipster, explaining that at this point in Australian retail, his business is keen to try all new approaches available to secure new sales online.
“It’s always competitive, it’s getting more competitive, but I think the good retailers will end up doing well [in this climate]” he said at the time.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on Twitter, Facebook, LinkedIn and Instagram.
Comments