A RETAILER SOLD US$15 million worth of iPhones in FIVE SECONDS on a single day recently. That’s literally five seconds.
The sales operation was JD.com in China, where e-commerce platforms are set up to handle millions of transactions a second during on-line “shopping festivals” – and are reporting good results this year.
Mass discount offers on “shopping festival” days are causing an online boom. Picture by Mentatdgt/ Pexels
The world’s retailers are complaining about going through difficult times, but they may be missing the biggest sales opportunities in the world.
People around the planet know about e-commerce leader Amazon and US e-shopping festivals like “Cyber Monday” and “Amazon Prime Day”. But many are missing the fact that there are far larger e-commerce companies and much bigger shopping festivals on the planet that they know little or nothing about.
One of them, known as the 618 Shopping Festival, is coming up tomorrow (Friday June 18, 2021). It’s a huge event. In 2020, the transaction volume of JD on June 18 reached 269.2 billion yuan (US$42.15 billion), and the gross merchandise value of products moved by Tmall stood at 698.2 billion yuan (US$109.32 billion). The two platforms alone saw nearly 100 billion yuan in sales.
Even bigger is Singles Day, on November 11. Last year, retailers sold four times as much during Singles Day than during America’s Cyber Monday.
The 618 Shopping Festival started as the anniversary celebration of JD.com. It was on June 18 of 1998, that Liu Qiangdong started his own business in Zhongguancun (Chinese: 中关村), the technology hub in Haidan, Beijing. But the celebration grew and one by one, other e-commerce platforms joined, including Taobao, Suning, Pinduoduo, and Douyin.
Designer clothes are returning to consumers’ attention in China. Picture by Edgars Kisuro/ Pexels
RUNS FOR WEEKS
But, like Christmas in the West, what is ostensibly a one-day event has spread into an event that stretches out for days or weeks.
The 618 Shopping Festival started this year on May 24 with presales campaigns. Heavier promotion started in early June and the campaigns will continue until late this month.
China consumers are being bombarded with online promotions promising them a share of billions of yuan in shopping subsidies, and if they find a better price for their purchase on another e-commerce platform, they get refunds.
FIGURES UP THIS YEAR
At the moment, things are looking good, with JD Data reporting a huge jump in sales compared to last year. But then last year was a low point with many Chinese cities in lockdown because of the pandemic. This year, sellers and shoppers are back in action, so naturally there has been a rise in year-on-year sales figures.
But still, it’s not easy to make money if you are not one of the big players. And shoppers are not always easy to reach. Analysts say that intensifying competition means that online sales growth in general is already slowing as the markets fragment. Also, just as with Christmas in the West, some people complain that the heavily pushed consumerism is turning them off.
JD.com’s sales page in Hong Kong
If selling during 618 is getting tougher for Chinese retailers, then of course it will be even more difficult for retailers from around the world who are not familiar with Chinese consumers’ wants and needs and habits.
That’s where smart international companies are realizing that they need to learn more about the world’s biggest community. You can’t sell to a customer whose needs you don’t understand.
Furthermore, the polarization generated by the hostile elements in Western society is causing a rise in nationalism in the Chinese consumer, who would rather buy locally made goods.
Still, many Western brands are making the effort. Look up Alibaba’s Tmall site and you find a range of products from British companies like Waitrose and Marks & Spencer. JD claims to have more than 900 international brands represented.
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Main pic: File photo of salesman. Picture by Mentatdgt/ Pexels