11/11 (The Chinese Black Friday)

11 Nov

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For those of you who cast bitter dispersion on Valentine’s Day and the other lover-focused holidays, here is a day you might want to get behind!

November 11 (11/11) is China’s “Single’s Day” also known as  Guānggùn Jié (光棍节). The number 1 represents the single individual, standing tall, proud, and (on 11/11) united together with lots of other 1s. Of course, eleven could also be 1 + 1 = 2 – so it is also a holiday where single’s confess their feelings and hopefully become part of a 2.

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It isn’t exactly clear where the holiday came from, although all agree college students started it. Some legends say that a boy’s dorm full of single boys decided to meet girls by hosting several activities on 11/11 in the hopes of meeting a girlfriend. Others say that they decided to buy themselves lots of presents to make themselves feel better about their “single-ness” and to sort of combat the depression that came with not being part of the Valentine’s day gift-giving phenomenon. In general, China has a gender-balance issue with far more boys than girls in the current “dating” generation. It has created a larger number of singles than they are used to experiencing and “singleness” has become a more widely-felt issue than in the past. So a day to boost the spirits of those non-coupled people started catching on and the holiday started spreading to other college campuses.

Whatever its origins, 11/11 or Double 11 has turned into one of the world’s LARGEST shopping events ever. It’s the day when singles can buy presents for themselves – treasure and items they’ve been keeping an eye on for a while. Unlike the US which operates around Amazon, Ebay, Walmart, Etsy, etc., China has its own online shopping marts in JD.com, 1688.com, Taobao, and TMall. At the same time, many small businesses run their online companies via social media in the form of WeChat, Weibo, and QQ. And come 11/11, and they all make a showing of coupons, discounts, sales, advertisements, massive marketing, and more.

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This year (2016), revenue was expected to reach more than $20,000,000,000. That’s almost $5 Billion more than Alibaba alone made in 2015. In 2014, the sales of 11/11 were twice the size US shopping megahauls on Cyber Monday and Black Friday in 2015. They certainly were well on their way to hitting their estimates this year with almost 180,000 people filing purchases each second and sales up to $5 Billion in the first couple of hours today.

So how does it work? In the days leading up to the sale, the companies put out their advertisements. Shoppers can put items in their cart ahead of time, and the price will simply update as soon as the sale starts. Then, when the clock strikes Midnight, you race to purchase. Given that most of these companies operate primarily through phone apps, it is unsurprising that most purchases this year (greater than 80%) were made via phones. It also doesn’t hurt that Chinese wifi is notoriously slow outside major cities and all but stops completely on 11/11 due to massive usage rates–so your best internet options are via Mobile Data. So at around 23:59 on November 10, every has their products in the basket and the phones ready to go. As soon as the clock changes over, the mad dash begins. Products sell out in seconds, with some gone in under a minute. The whole system starts crashing almost immediately under the pressure, as I saw today with Taobao constantly rejecting my purchases and Alipay (China’s PayPal) crashing for the first 2-5 minutes.

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Notice that three of the major online shopping companies (Taobao, T-Mall, and 1688) all belong to Alibaba – China’s largest company. Alibaba is who took a ‘small-time’ holiday and turned it into a national event. Alibaba realized that sales were great before the National Holiday (first week of October) and later in the Spring. But late Fall/Winter didn’t really have a major shopping day. So they decided to capitalize on the absence and create their own shopping holiday. Examining the increasingly popular 11/11, they decided that the day was perfect and the opportunities vast. In 2009, the company started the first of their large scale advertising campaigns, although only 27 sellers participated at first and they only made around $700,000.

But the timing was right, given that E-commerce was just starting to take off. Between 2009 and 2013, Alibaba saw a 5,000%+ increase in their 11/11 revenues, launching owner Jack Ma into Chinese and international stardom. In 2011 (a super lucky 11/11/11), they sold closer to $80 million. And this year they surpassed their 2015 sales of $14 billion within 16 hours. The event is in fact so important that Alibaba trademarked 双十一 (Shuāng shíyī which means Double 11). Their advertising is the stuff of legends, having morphed now into an international incident. Earlier this month they hosted an 8-hour fashion show to jump start the event, and last night they put on a three-hour television “special” where famous Chinese and Western stars (the Beckhams came by), singers (One Republic made a showing), and moguls came out to speak with Chinese shoppers and encourage them to lay down the cash.

Within 5 minutes, Alibaba had already sold almost $1 Billion, and after 7 minutes the number was up to $1.5 Billion. At 10pm, they announced their GMV (Gross Merchandise Volume or Revenue) was approximately $16,000,000,000. Even if you accept some people’s argument that as much as 25% of all products are later returned or cancelled, it’s still obvious that the market is growing and holiday spending is on the rise.

It’s worth noting that Alibaba also owns Ant Financial, the company operating Alipay – China’s largest online payment services program and the main competitor to Paypal. With 20% of all sales going through Alipay, that makes up more than 176 million online transactions they profited from today.

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Foreign Imports are certainly not left out, with companies like Apple, Nike, Ugg, Zara, and Korean Make-up brands bringing in fortunes. According to Alibaba, this year’s most popular brands have been Nike, Apple, New Balance, Playboy, and Skechers. However, Pampers, Mead Johnson, and Wyeth are popular among the rural areas. In addition to the US, major international sellers include South Korea, Japan, Germany, and Australia. Some foreign companies use the day as a launching moment for new products or branches. The US led sales last year, and imports made up about 10-11% of all sales on 11/11.

At the same time, I have noticed a marked slowing down amongst the local students in shopping on this holiday. Many point out that companies will actually raise prices before the holiday, such that the discounts are really the normal price rather an a sale. Students also dislike the fact that delivery (which usually is around 1-3 days in China, even for the cheapest shipping) can take up to 2-3 weeks after 11/11. Some companies won’t even attempt shipping perishables until the madhouse dies down, with one company telling me they would suspend my shipment of cheese for 10-20 days until they were sure it would reach me with the ice still intact. Thankfully, my experience with Chinese packaging has been extremely good – packages are well wrapped, safely ensconced, and almost always arrive undamaged by the trip.

Nonetheless, almost everyone has pitched in and made a few purchases today. I ended up spending far too much (don’t tell) because I picked up some household appliances that were on sale. Household appliances are a big deal today – for example a 2000RMB oven was priced at 200RMB today and some baking pans had a 100RMB discount. Snacks, clothes, electronics, and beauty products are also major sellers. Now that winter is starting to come, many students picked up some winter coats and warmer clothes. While others wait until today to hit up JD.com for computers, tablets, phones and more.

So if you are tired of watching couple exchange gifts on lover’s day, then take the Chinese advice and buy something for yourself on the next 11/11! As I’m writing this, it’s just hitting midnight here in China, but you still have a long time in the US! If you were buying a present for yourself, what would it be?!?

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