Singles Day: Turnover of billions in one day
On Singles Day, every year shopping madness breaks out in China. On only one day, retailers attract millions of customers with online deals and are constantly turning over new record sums. The resulting flood of orders is a tremendous feat for logistics and fulfillment, which Arvato Supply Chain Solutions China has successfully mastered with good planning.
On November 11, China hosts the country's largest online shopping event, which in the past ten years has become one of the highest-turnover days in e-commerce: Singles Day - also known as Double 11 - is in fact an "anti-Valentine day" for singles because the date consists only of ones - the symbol for singles in China. The Chinese e-commerce giant Alibaba made it popular as a shopping day, celebrating the day for the first time in 1993 with a huge discount. The idea behind it: Single people don't have to have a family and can indulge themselves. A concept that has been a complete success. According to data from Statista, 27.2 billion euros were turned over by Alibaba alone on Singles Day in 2018, which corresponds to an increase of 27 percent over the previous year. During the 24-hour shopping marathon, the products of around 180,000 brands such as Nike, Adidas and Apple were offered at special conditions, selling goods worth over 12 million euros in the first 30 minutes. No wonder, since Chinese consumers are considered to be particularly price-sensitive. Not only are sales prices shared on social media platforms. A particularly favorable purchase price is celebrated as a success.
Order volume ten times higher in one day
As a result, many customers in China are waiting for November 11 and postpone planned large purchases until then. When the signal is finally given, buyers will have access to thousands of offers ranging from smartphones to furniture, clothing and cosmetics.
The sharp short-term increase in shipping volumes is a major challenge for fulfillment and logistics. "On Singles Day, the order volume for our customers increases almost tenfold," says Raoul Kütemeier, Head of Asia at Arvato Supply Chain Solutions.
"In normal operations we process around 8,000 orders a day, on November 11 there is an absolute peak - that's now around 60,000." This is not solely due to the fact that consumers hold back their orders until Singles Day. "Our customers not only place their special offers on the e-commerce platform Tmall, but also integrate almost all sales channels."
In China, however, the largest volumes are handled via platforms rather than individual websites. This is due to the price transparency offered, which is particularly important to Chinese consumers. In order for online retailers to achieve the best possible profit increases in this environment, there are special marketing companies that specialize in trading platforms.
Important numbers of the Singles Day 2019
- Overall, according to Alibaba, goods worth 38.3 billion dollars were sold on the Alibaba platforms (+24% compared to the 30.8 billion dollars in 2018).
- For the first billion it took 68 seconds.
- In the first hour a turnover of about 12 billion U.S. dollars was achieved.
- The total number of orders from 2018 was reached in 2019 after 18 hours 31 minutes.
- Approximately 500 million online orders were received in the 24 hours.
Good preparation is the key
Arvato Supply Chain Solutions' customers in China mainly come from the high-tech & entertainment and consumer products sectors, including leading international companies such as the Swedish cosmetics company Oriflame. Around 300 employees in various distribution centers provide comprehensive logistics and fulfillment services for these customers, ranging from complete warehousing and transportation to import and export processing and value-added services, as gift packaging or specially packaged promotional packages are the order of the day in e-commerce. Seasonal peaks such as Singles Day are thoroughly prepared to ensure full customer satisfaction. "We plan such events already weeks in advance together with our customers: We calculate the capacities, rent extra space at short notice if required and train an average of 100 temporary workers in order to process the volumes as quickly as possible," explains Raoul Kütemeier. "In addition, we try to pre-produce as much as possible operationally - for example, product bundles are tied in advance.
Maximum delivery time is three days
As Singles Day is celebrated almost exclusively in China, no international transport is necessary on this shopping day, although Arvato Supply Chain Solutions supplies the whole world from Asia.
In total, it takes a maximum of three days from order to delivery, depending on the region and the scheduled delivery date.
In large cities, consumers are generally even supplied the next day. A service that can be easily implemented with the excellent parcel service providers in Asia. "Here it has been customary for several years to call the consumer before his parcel is delivered - he is now even informed via chat or SMS," says Raoul Kütemeier.
Platforms are on the advance
Singles Day is extremely important not only for local traders, but also for online sellers from the West. Not only is most of the sales generated on November 11 - the shopping day is also an important opportunity to position your brand. Western online retailers can offer their products on the special Tmall Global platform without having a presence of their own in China - but they do not participate as strongly in the record sales there, as the discounts are generally lower than on Tmall. "Analogous to China, online platforms and shopping days such as Black Friday have also established themselves in the US shopping culture," explains Raoul Kütemeier. A significant decline in volume is also noticeable here in advance, as customers wait until the bargain hunting begins. "I think that the platforms with their action days will also gain importance in Europe in the future. However, it will be difficult to top the Singles Day - here currently a higher turnover is generated than on Black Friday and Cyber Monday combined..."