How Alibaba Plans To Reinvent Retail With 1111
I write about China e-commerce, tech, consumers and supply chain
Opinions expressed by Forbes Contributors are their own.
Daniel Zhang, chief executive officer of Alibaba Group Holding Ltd., during a news conference at the launch of the company's 11.11 Global Shopping Festival in Hong Kong in late October. (Photographer: Anthony Kwan/Bloomberg)
What used to be known as "Singles Day" in China has been redefined and rebranded as "The 11/11 Global Shopping Festival" by the holiday's e-commerce patron saint, Alibaba, and with good reason. This year's 11/11 is going glam, global and digital.
Nine years ago, Alibaba used Singles Day to offer massive discounts to draw consumers to their platforms Tao Bao and then Tmall. Last year, it became the largest single-day retail event in human history, producing $14.3 billion in sales for Alibaba. This year, the e-commerce giant will likely sell between $17 and $20 billion worth of goods in 24 hours. There will also be a celebrity-filled gala in Shenzhen, China to count down the hours to 11/11, the culmination of a three-week lead up full of new technology roll-outs, special events and new market openings.
But the real purpose of this year’s 11/11 event is for it to be a launching pad for chairman Jack Ma's dream of reinventing and digitizing retail—first in China, and then around the world, and to take the first step in “serving two billion global customers.”
Some of the best known brands and retailers from around the world will be active participants this year and those who aren't, had best pay close attention and start making plans to take part next year, because their future could be at stake. This 11/11 has the potential to alter the future of e-commerce, bricks and mortar retailing and global brand engagement forevermore.
The short-term prize: 600 million Chinese consumers
The initial draw of Singles Day was the massive discounts, but it takes much more for brands to be successful today.
Selling directly to China's 600 million online shoppers is important, but 11/11 is also "the most critical opportunity for brands to connect and engage with Chinese consumers, to build awareness and relationships for the long term" says Denise Sabet, manager of Labbrand in New York, a Shanghai-based brand positioning and naming agency.
"It is no longer a choice whether to participate in Singles Day or not, it's a given. How a brand approaches Singles Day should be informed by its brand positioning: a trendy fast fashion retailer vs. a trusted home appliances brand vs. a luxury skincare label, all should have their own take on how to leverage the day."
Sabet also points out that "If a brand doesn’t have clear positioning and a great name for China, they will struggle to make important choices around Singles Day, let alone in-store experience, advertising, partnerships, and more the whole year through."
The long game: A new retail model
The Global Shopping Festival will draw plenty of attention with its expected record sales, the number and quality of foreign and domestic brands taking part, and the sheer scale and numbers of consumers taking part. But the real story this year is how Alibaba is using the day to launch its initiative to remake global retailing and become the first truly global e-commerce platform. Here's how they will do it.
Step one: going glam
Singer Katy Perry (Photographer: Daniel Acker/Bloomberg)
Building on the success of last year's gala, Alibaba has hired Hollywood producer David Hill, known for his work on the Oscars, Super Bowl and American Idol, to direct and produce this year’s four-hour live entertainment spectacular. The New Year’s Eve-style countdown show will feature headliner and global ambassador Katy Perry, along with other big names such as Kobe Bryant and One Republic with others to be announced, and end with the unveiling of the order ticker that will tally the sales over the following 24 hours. The event will be live streamed in China and other parts of the world but not in the U.S. To cover that gap I will be live-blogging from the event here on Forbes so you can follow along on November 10.
The slickly-produced show and celebrities will ensure global coverage. This is important because in the U.S. and Europe Alibaba is still virtually unknown to consumers and awareness is still very low among brands and retailers. Much like the 2014 IPO, the gala will raise Alibaba's and 11/11's brand awareness.