Chinese consumers are eagerly anticipating November 11, China's biggest online shopping day of the year.
Many brands on e-commerce platforms will offer big discounts on that date, also known as Singles' Day or Double 11 in China. Big-name international manufacturers have seized the opportunity and have been joining forces with e-commerce platforms ahead of the mega-sale.
This cooperation can boost their sales and improve their reputations. But experts said that their efforts after the festival are more important if they want to hold onto customers for the long term.
Held on November 11, Singles' Day has become a banner occasion for tens of millions of Chinese consumers, the country's broader e-commerce industry and many big-name international manufacturers. Some of these famous brands, unable to wait to get into China's market, have begun to cooperate with the country's e-commerce giants ahead of the festival.
Singles' Day, also known as Double 11, has become China's biggest online shopping day.
Alibaba Group's Tmall Global, a cross-border online shopping platform dedicated to official brand stores, had added Albert Heijn, the largest supermarket chain in the Netherlands, to its platform, the two companies announced on Friday.
Albert Heijn is one of the best-known Dutch brands with almost 1,000 stores in the northern European country and a history dating back nearly 130 years. Through the Tmall Global platform, Chinese consumers will have direct access to a selection of products for mothers and babies, healthy snacks and personal care from Albert Heijn.
Albert Heijn is one of several well-known international brands eager to access the Chinese market ahead of Singles' Day.
Mountain Warehouse, a British outdoor clothing and equipment retailer with more than 200 stores in Europe, announced its launch on Tmall Global.
"The launch in China on Tmall [is] seen as a low-cost way to get the brand out there," Kate Calvert, an analyst at Investec, was quoted as saying by the UK-based newspaper The Independent on October 16.
"There are already 5,400 international brands from 25 countries and regions on Tmall Global," Liu Peng, general manager of Tmall Global, told the Global Times on Friday.
Reaping revenue
It is not by chance that the e-commerce giants are introducing many well-known international brands to Chinese consumers before November 11.
"The main purpose for them is to gain soaring sales revenue by providing diversified overseas goods to Chinese consumers," said An Mi, deputy director of brand center at GOME Electrical Appliances Holding Ltd.
China's e-commerce giants such as Alibaba, JD.com Inc, suning.com and Vipshop Holdings Ltd have been hyping their sales for Singles' Day in recent days.
"This is a good time for companies, especially the listed e-commerce companies, to boost their revenues," An told the Global Times on Monday.
An's words were supported by sales volume these e-commerce giants reported in last year's Singles' Day.
Alibaba recorded 278 million orders valued at 57.1 billion yuan ($9.32 billion) during last year's Singles' Day, while JD.com said it took more than 14 million orders, though didn't specify the value of those sales.
Alibaba has been planning for a long time to added well-known international brands to its Singles' Day offerings. The company announced on October 13 that the highlight of this year's Singles' Day is global buying and selling. It will add many big-name international brands to its online platform for the November 11 sale. Those brands will offer new products and special offerings.
An noted that Chinese consumers' appetite for high-quality imported goods has grown as their standard of living has improved.
An disagreed with some analysts who have said that Alibaba and other e-commerce companies have had to undertake an internationalization strategy because of the saturation of the domestic market.
"E-commerce is still unavailable in many third- and fourth-tier cities, as well as China's countryside, due to a lack of delivery services there," she said. "Those areas have a huge potential market."
Many international brands like Albert Heijn have their products available for preorder on Tmall Global. So far, advance sales have been solid.
"All of Albert Heijn's goods available for preorder on Tmall Global are sold out," said Hanneke Faber, chief executive officer of Ahold Group's online business. "And we have to restock supplies if possible."
In her view, the scale and growing professionalism of China's e-commerce platforms are what attracted her company to China.
"Singles' Day is just a beginning, and we will send more hot commodities to China batch after batch," she told the Global Times on Friday.
An said that these famous international brands want to build their reputations during this eye-catching time through cooperation with big e-commerce platforms in China.
Follow-up effects
Although big-name international companies may sell popular goods during Singles' Day, they may not make much of a profit from the sales due to the deep discounts they have to offer, An said. But it doesn't matter because they're playing a longer game.
"What they care about more is their long-term development in China," Liu noted. "At this point, they still have high expectations for their prospects in China."
"But they won't succeed in China through one single shopping festival. It will take time for consumers to accept them," An cautioned.
As for the listed e-commerce giants, she added, they cannot continue with these mega sales for long because they are under a lot of pressure to meet investors' earnings targets. These kinds of sales rely on discounts that are so deep that the retailers can only make meager profits, or none at all.
According to An, the key to the success of the e-commerce companies will be satisfying consumer demand. As a platform, it is crucial for the platform to transmit consumers' preferences to manufacturers.
For example, about 30 percent of GOME's goods are customized and differentiated products based on consumers' preferences and demand, according to the company.
The fierce competition online has also had an impact on bricks-and-mortar retailers, forcing them to adopt similar methods.
About 17 retailers including Intime Retail (Group) Co Ltd and Dashang Group have decided to sponsor their own shopping festival, which will run from November 11 to November 16, the Beijing Business Today reported on October 23.
