Two Aussie retailers take on Singles Day
Shenzhen, China – Less than 10 hours into China’s Singles Day on November 11, Australian and New Zealand retailers had already surpassed their total sales from the entire 24-hour online sales event in 2015.
By the end of the day, the total value of orders placed with Australian merchants would make it the fourth top-selling country behind Japan, the US and South Korea. Last year it was fifth.
Boosting the profile of Australian and New Zealand brands in the shopping festival has been the goal of Chinese e-commerce giant Alibaba’s new team in Australia for the past several months.
“When we announced the opening of our ANZ office earlier this year, one of our goals was to improve the country’s outstanding performance in Alibaba’s 11.11 sale,” Maggie Zhou, Alibaba’s Australian CEO, told Inside Retail Weekly at the event last week.
Her efforts were aided by Chemist Warehouse, which generated RMB 23 million ($5.1 million) in sales at the shopping festival last year, the most of any overseas seller on Alibaba’s Tmall Global platform, and brought Singles Day to the attention of many Australian retailers for the first time.
Singles Day, as we know it, was created in 2009 by Hangzhou-based e-commerce giant Alibaba, which turned a pseudo-holiday in China into a global online shopping extravaganza capable of generating billions of dollars in sales for tens of thousands of participating merchants.
A growing number of the over 1,300 Australian and New Zealand retailers selling into China through Alibaba’s Tmall and Tmall Global platforms are now taking part in Singles Day. Chemist Warehouse, Woolworths, Blackmores, Swisse, a2 milk, Jurlique and Lorna Jane were among the Australian brands vying for Chinese consumers’ wallets this year.
Speaking to Inside Retail Weekly on the ground in China, Damien Gance, a spokesperson for Chemist Warehouse, said the pharmacy retailer started discussing its strategy for this year’s event in April to ensure the day went off without a hitch.
“The intention was that if you went into one of our Australian retail stores, you’d have no idea that Singles Day was going on,” he said. “We planned, gave ourselves sufficient time to execute and applied appropriate resources, so our Australian business could continue unabated and our China business could gear up for Singles Day.”
This entailed predicting which products would see increased demand during the sale, ordering additional stock and getting everything to the right place for shipment. Chemist Warehouse had over 2,500 pallets of stock in bonded warehouses ahead of the event, a necessary precaution after it ran out of stock before Singles Day was over in 2015.
“We do a lot of research domestically with the Australian Chinese community, as well as in mainland China, looking at our sales and what happens when we drop the price. How many more do we sell? What’s the degree of frenzy?
“Now that we’ve been trading on the Tmall Global platform for over 12 months, we understand the percentage of annual sales that occur on Singles Day, so we can bulk everything up to prepare,” Gance said.
This year, Chemist Warehouse reached its total turnover from Singles Day 2015 in just over one hour. In the end, it saw a total order value of more than RMB 104 million ($20 million), cementing its status as Singles Day’s top international seller.
The pharmacy retailer’s success has come on the back of strong Chinese demand for health and wellness products, including vitamin supplements and nutraceuticals. But a year after it first launched on Tmall Global, Gance sees growing interest in other product categories.
“What we’re getting now is a little bit more of looking well, as opposed to just feeling well. So, we’re seeing increased purchases of gentle and organic skincare products, moisturisers and the like,” he said.
According to Zhou, big data backs up the idea that Chinese consumers are looking to buy a wider variety of Australian products, including seafood, beef and travel packages, online. Alibaba’s upcoming “Australian Fresh Food Week”, part of an agreement between Alibaba and Austrade, taps into that trend.
“Chinese consumers aren’t just purchasing products from Australia, they’re asking their friends in Australia, ‘do you know that brand?’ Consumers want to buy the lifestyle, what people are actually using, not just the brands that are customised for the Chinese market. That doesn’t work,” Zhou said.
Lorna Jane is one example of this. After launching a storefront on Alibaba’s Tmall platform in September, the activewear label had little time to prepare for the Singles Day sale. For the Brisbane-based brand, however, the goal was never really to sell as many products as possible, but rather to increase brand awareness in the country.
“Two years ago, the company took the direction to grow globally and specifically into Asia,” Ron Tong, Lorna Jane’s chief executive in Asia, told Inside Retail Weekly. He sees the alignment of the brand’s message of female empowerment and the changing demographics of Chinese consumers as driving its growth.
“Women [in China] between the ages of 20 to 40 are generally far more educated than their mothers and grandmothers. They have much more disposable income than their mothers and grandmothers did and they have much more say and independence.
“If they’re in a partnership or family. They sometimes even have control over the finances or are the main breadwinners,” he said.
Lorna Jane didn’t have any expectations going into its first Singles Day, according to Tong. “We just wanted to make sure that it went well and we were able to execute. Considering the newness of the team we had, I’m quite happy with how it progressed.”
The activewear brand typically releases limited monthly collections, and it didn’t alter this approach for Singles Day, creating a sense of exclusivity at the big online shopping event. The trick is now to maintain that brand awareness on ongoing basis.
Over the next week, more than 600 million Singles Day packages will need to be delivered, a new record. And while Alibaba has copped criticism for its handling of Singles Day deliveries in years past, Chemist Warehouse and Lorna Jane say they haven’t experienced any logistics issues so far. “Our biggest problem was getting all our SKUs up on the Tmall website in a short period of time,” Tong said.
Heather McIlvaine attended the 2016 11.11 Global Shopping Festival in Shenzhen, China, as a guest of Alibaba.