November 11, the Chinese singles’ day, which is a online shopping festival made by a famous e-commerce company from China, Alibaba. 91.2bn yuan($14.3bn; £9.4bn) was sold that day, according to report from BBC(2015). All of my friends in china focus on shopping website like Tmall all the day!
Why is it so crazy and everyone try to engage in it? Is it really benefit all of us? I don’t think so.
Let me show you how it works first.
Alibaba requested the shop which want to join in the festival have to set the price 10% lower than the transaction price between September 15 and November 10, and the price of the goods which participated the activity can not lower than that between November 12 and November 26, except for some categories like top-up service, electric home appliances. (The business rules of singles day event in Tmall, 2015)
Did it really benefit all the customers?
Some consumers were not benefited. First, never believe the so called ‘50% off’, because most of the product never been sold at original price online, i.e., they are on sales all year long. It is easy for impulsive consumers or those who were not familiar with the price of goods online to buy many goods they do not need and actually the price of the goods is just about 10% lower than the regular price. In fact, the more people do the shopping on that day, the more people believe they would lose the benefit if they do not follow the trend without considering whether the goods they bought are really much cheaper or not.
Did it really benefit all the shop?
No, it also depends on what strategy the shop did. For some shops, the goods on sales are those not popular and full of stock, so this is the best time to clear off their stock, like the clothes shops. For some shops, they choose a few goods to give them a big discount to bring traffic while giving other goods a little discount for making profits. However, for other shops, they are forced to join in the event, otherwise they will fall behind their competitors quickly. Then, they lost their profits as they sold a huge amounts of goods in a lower price to the consumers who need not buy anything again within one year, like the detergent shops.
In fact, because of the event, there are also two off-seasons before and after that festival. Because the consumers would not do the shopping before the event to wait for cheaper price and spent all their money in the event. That’s one of the reason why this event is so hot.
In summary, not everyone can get the benefit in this event. For those clever buyers, they could get benefits in singles’ festival but it is much less than most customers thought, while the other buyers have to pay for their impulsion. For those smart shops, they could get the benefit from the crazy customers, while the other shop worked so hard to sell a lot but did not improve many revenues at all. However, what can be confirmed is that Alibaba is definitely the biggest winner in this game.
References:
Siilu (2015) The business rules of the singles’ day event in Tmall. Siilu, 18 August. Available from: http://www.siilu.com/20150818/145303.shtml. %5BAccessed 12 November 2015].
BBC (2015) China’s Alibaba breaks Singles Day record as sales surge. BBC, 11 November. Available from: http://www.bbc.co.uk/news/business-34773940. [Accessed 12 November 2015].
edward 
I believe that Alibaba is winner in this single’s day but it is not the biggest. As we know, Alibaba has paied more budgets during this activities, including advertising and promotion. Maybe Alibaba get the most strongest reputation in it but I think the logistics industry is the biggest winner. Actually logistics companies rely on quantity of consumers without much money in promotion, so they can get a lot of profiles after 11/11.
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Well, the logistics industry always developed with the e-commerce, it can not be denied that logistics companies exactly benefited a lot in this event. And it is also a big challenge for them to handle these huge, fast-growing number of orders.
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Yes, maybe the logistics industry should pay more attention to after-sales service though it has not paied much money in this festival, it is no doublet that the maintenance and management are challenges for them.
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personally, i regard myself as one of the irrational consumers, for i will be motivate by the sales event easily. for i think even the sale discount is small, but i should just join the sales ceremony and get some regular supply on something, such as skin care or cosmetic. i had not experience on the tmall’s sales events, but in England, there are two large sales in the Christmas and summer. Although there are huge discounts on some of the luxury brand, the problem is there are only available in stores, so it is hard to engage and enjoy the sales. therefore, be as the online retailers, i think Alibaba are doing quite well on developing the sales event into a festival.
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Exactly, and the strength of Alibaba is that its online shopping mall has all kind of goods that you can buy almost any categories of product you want just simply through clicking in your laptop or mobile phone, which is one of the reasons why the engagement of the event is quite good.
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Actually, I engaged into this festival since the year it became a festival. I really agree with you that we customer have to be smart to truly get benefits from this festival. But I’m ok with the fact until this year. I’m a bit surprised, actually a bit angry that ALIBABA was indeed the biggest winner of this even.
I got news that the refund rate was rather high because of shortage or low quality of the products. The selling number is actually not that amazing in fact. And, ALIBABA didn’t allowed the refund until one day later! That means, ALI got a huge cash flow that day due to that fake transaction volume! This situation must be controlled, otherwise, the market would be a massive.
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You are right, some shops took those unsalable goods for sales in order to clear off the stock is one of the reasons for that issue. And the larger transaction volume they got, the more people will trust them and follow the trend to participate in the event.
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Truth, that’s the traditional tricks among e-commerces. Fake products specially for double 11, fake low prices and telling customer products were out of stock. All kinds like these things make the transaction volume so ‘amazing’.
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Interesting that everyone is talking about the sales of alibaba on single’s day. I personally think that consumers do have the opportunity to gain the bargain due to this big campaign. But if you are a savvy consumer, I would not bother buying some products I haven’t thought about before, and I personally do not believe in the price shown on the webpage. Mostly, I would buy the goods I put on the wishing list before. ahah
In terms of the price competition on taobao, I consider it is an inevitable phenomenon coz this is the market where all sorts of venders compete to win the market share. However, I reckon some proper rules could be enfored to regulate the taobao market in terms of some fake reviews or fake orders…
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Yes, I not deny that consumers can save money in this event, but actually, those impulsive consumers are easy to over consume some goods just because of this little discount. It is true that price competition is inevitable, but how to use the price strategy appropriately and provide other services to create more value is better than that always setting a low price for goods.
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