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Neelima Mahajan-Bansal
Intrepid explorer. Currently focused on China, the world's laboratory.

A Nation of Shopping Freaks

Last year, we were at a friend’s place for dinner in Fremont, California. She and her friends were planning to camp outside Macy’s in San Jose at midnight, waiting for the store to open. She invited me to join them, but I graciously declined. Much as I love shopping, I don’t have the patience to queue up at night and later have my toes trampled upon in a near stampede when the shop finally opens its shutters to let the milling crowds in.

It was Black Friday, the day American shoppers go berserk. (And they go berserk again on Cyber Monday, the day after Thanksgiving, when they get great discounts online.)

I thought that I had seen the height of shopping madness. And then I came to China…

Few days into my new job and I discovered that my colleague in the next cubicle was a shopping freak. She scanned e-commerce sites during lunch break, ordered online and frequently had packets delivered in office. Most of the time, she bought clothes.

Sometimes she would get a little more adventurous. One day, she walked in chuckling. I looked at her curiously as she tore open the latest parcel that had come in – out came a skull-shaped glass jug and skull-shaped drinking glasses. I fail to understand what kind of pleasure would anyone get drinking out of someone else’s cracked skull.

 Inside the headquarters of Alibaba on the outskirts of Hangzhou / Courtesy: Reuters

Inside the headquarters of Alibaba on the outskirts of Hangzhou / Courtesy: Reuters

I found out that this online shopping spree was not particular to my colleague alone. Every morning hordes of motorised cycle-rickshaws criss-cross through Beijing lanes delivering goods purchased online. And the delivery service is prompt…really prompt.

An order made online at 9 pm may find its way to your doorstep the next morning at 9 am! When these delivery vehicles park outside an office, the scene resembles a small marketplace – or perhaps a visit by Santa himself – as a stream of excited office-goers pours out of the buildings to collect their goodies (if the office permits, most will actually deliver it at your desk). This happens every single day, and not on a festival, a holiday, or any occasion.

And then there are festivals and holidays – and the manufactured ones. Take the curious case of Singles’ Day.

Singles’ Day (Guanggun Jie), or 11.11 (11th November), is a celebration of bachelorhood with the repeated occurrence of the number 1 in the day signifying singles. It turns out that some time in the 1990s, a bunch of students in Nanjing came up with the idea of celebrating their bachelorhood. It didn’t take long for the phenomenon to spread across the country, and it took even lesser time for China’s smart e-commerce companies to turn it into a marketing ploy.

Online retailer Dangdang, considered China's answer to Amazon

Online retailer Dangdang, considered China's answer to Amazon / Courtesy: Reuters

All of China’s e-commerce companies – from Taobao and Tmall to Dangdang and 360buy – give crazy discounts on Singles’ Day. They run 24-hour sales on that day. The discounts are, in some cases, as high as 70 percent – and they sell everything from clothes to washing machines and cars (it’s a different story altogether that China’s e-commerce retailers constantly operate on wafer thin margins and indulge in fierce price wars to outdo each other).

For the e-commerce retailers, it takes months of preparation to whip up such frenzy. They create campaigns which run on TV and sites like Sina and Youku (China’s YouTube counterpart), and advertise on billboards in subways and bus stations. On the day of the actual sale, affairs are run with the precision that one would expect of something like the Pentagon.

China’s 193 million online shoppers went berserk on Singles’ Day. As a result, workers at courier companies had to work in 24-hour shifts, and employ temporary staff.

Here’s what transpired in various Chinese e-commerce companies on this day:

  • Tmall’s sales: RMB 13.2 billion ($2.1 billion)
  • Number of visitors on Tmall: 100 million
  • Tmall and Taobao’s combined revenues: RMB 19.1 billion ($3.04 billion, three times more than last year)
  • Total number of parcels sent from Tmall and Taobao: 28.5 million (compared to an average of 8 million a day)
  • 360buy’s sales: RMB 2.5 billion ($403 million)
  • 360buy’s orders: 4.5 million
  • Electronics retailer Suning.com’s orders: 2.96 million (20 times more than the previous year)
  • Dangdang.com’s sales: RMB 100 million ($16.1 million)
  • Number of delivery employees working on Singles’ Day: 800,000 employees, including 65,000 temporary workers

 

While composite industry-wide figures for Singles’ Day sales are not available, with sales of $3.04 billion, Alibaba alone (the parent company of Tmall and Taobao) has outdone America’s total Black Friday sales of $1.04 billion this year! On Singles’ Day Alibaba’s Hangzhou headquarters apparently “set up 200 lounge chairs for its 800-strong staff to rest during the day” and “the company rented 180 rooms at nearby hotels for longer breaks”.

Tmall and Taobao were not the only winners in China’s Singles’ Day: I (definitely not single) walked away with a heavily discounted Philips hairdryer.

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Neelima Mahajan-Bansal
A former Forbes India correspondent, I worked for nearly 10 years as a business journalist in India before heading to the Graduate School of Journalism at University of California, Berkeley, as a Visiting Scholar in 2010. It was a step towards getting a first-hand experience of the US economic and business climate, as well as a great opportunity to get an insight into Africa with a Bill and Melinda Gates Foundation-funded reporting project of my choosing in the continent.
Post-Berkeley, one thing led to another, and in early 2012, I found myself braving sub-zero temperatures in Beijing, exploring the nuances of China's evolving business and economic landscape as Editor of CKGSB Knowledge (http://knowledge.ckgsb.edu.cn/), the research publication of Cheung Kong Graduate School of Business.
China is an exciting place to be and despite my constant struggles with Mandarin and unfamiliar food, each day opens my eyes to something new. Some of the things I find fascinating are MNC strategy in China and the evolution of Chinese companies into global powerhouses. Interestingly, several Chinese companies that haven't ventured beyond the Mainland are, in many ways, spearheading innovation in ways we cannot imagine. Another interesting trend that I am witnessing firsthand is the evolution of 'Made in China'. This blog is about my experiences and discoveries in the world's second-largest economy.
Apart from China, I have an abiding interest in Africa, where I spent the early years of my childhood. More recently, I have researched and edited two books, one of which was on Africa: Culture of the Sepulchre by former diplomat and UNESCO Goodwill Ambassador Madanjeet Singh (Penguin India, 2012), and Leading with Conviction: The Nine Principles of Integrated Leadership by Shalom Saada Saar and Michael J. Hargrove (Jossey-Bass, forthcoming).
The views expressed in this blog are my own, and do not represent those of the organization I work for.
 
 
 
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March 26, 2013 14:24 pm by Today in Tech: IIT PhDs; Open Internet; Onsite CEO; e-tailing in China & More | Forbes India Blog
[...] dispatches on Chinese internet and e-commerce companies by Neelima Mahajan-Bansal. (They are here: A Nation of Shopping Freaks; China’s Hi-Tech Grocer; Behind the Great Firewall: a Parallel Internet Universe [...]