Sales on Singles Monday broke e-commerce records and pushed China back into the spotlight.

Sales on Singles Monday broke e-commerce records and pushed China back into the spotlight.

When it comes to e-commerce, setting a date to focus promotions on is very fashionable. First there was Cyber-Monday, when marketers discovered that consumers returning to work from a Thanksgiving weekend of shopping were keen to actually carry on spending online. From this grew one of the biggest shopping dates on the calendar. This year the Adobe Digital Index expects Cyber Monday sales to reach US$2.27bn, up from US$1.5bn last year.

Given the global reach of US e-commerce giants it is little surprise that Cyber Monday has become a global event. Despite not celebrating Thanksgiving, online bargains and the proximity of Christmas has pushed Cyber-Monday into European and Latin American diaries too. Some countries have tried to go it alone. The UK’s “Mega-Monday” is a week later than Cyber Monday, while Australia has launched “Click-Frenzy” days with varying success. But the last two years have seen China hog the limelight thanks to the spectacular growth of “Singles-Day” on November 11th.

Humble beginnings

Singles day originated among students in Nanjing looking for a date to celebrate singledom and settling on the four ones represented by 11/11. In fact it is difficult to see the initial appeal to shoppers. China’s big shopping periods fall around National Day on October 1st and Chinese New Year in January and February. As a result November represents a lull, unlike the frenzied pre-Christmas scrum that begins in Europe and the USA.

However, this also explains the eagerness with which retailers have sought to appropriate the date as their own. Alibaba, China’s leading online retailer began to market on Singles Day in 2009. Sales were initially modest, at under US$10m, but have grown rapidly. Last year, transactions of US$3bn made Singles Day the biggest online shopping day of the year. This year it has cemented that position with sales estimated at Rmb35bn (US$5.75bn).

A tough market

E-commerce in China is growing quickly. Earlier this year McKinsey reported that online sales had seen a Compound Annual Growth Rate (CAGR) of 120% in a decade. According to the China Internet Network Information Centre (CNNIC) online sales last year grew 66% to reach RmB1.3trn (almost US$200bn). Growth slowed in 2013, but still reached 35% in the first nine months of the year, compared to overall sales growth of under 9%.

Online now accounts for 6-7% of Chinese retail sales, highlighting the speed of convergence with Western Markets. Even more striking is the role that smartphones and social media are playing. According to CNNIC around 40% of online shoppers browse using a mobile device while s-commerce is also receiving more attention in China than elsewhere.

Chinese e-commerce is a tempting, but tough market for foreign players to enter. Alibaba boasts a B2C market share of almost 40%. It is joined by 360buy and host of smaller operators who compete heavily on price. eBay has learnt this lesson painfully, entering the market in 2004 and exiting it two years later. Amazon has shown staying power but has barely carved out a share of 2%. WalMart’s controlling stake in Yihaodian has given the firm a tiny relative footprint to build on, while eBay’s second attempt to enter the market is low-key, using the acquisition of as a springboard.

Despite inauspicious starts foreign retailers are unlikely to give up easily on a market that shows little sign of slowing down, despite greater caution in the wider retail market. Based on nine-month growth levels of 35% Chinese online sales will reach US$280bn this year, passing the USA as the world’s largest e-commerce market in the process. Beyond this the sky is the limit with McKinsey forecasting that Chinese online sales could reach US$650bn by 2020.


Jon Copestake is a retail analyst at The Economist Intelligence Unit