Black Friday, Cyber Monday, Singles Day (and now Amazon). An online shopping bonanza putting logistics to the test
Today is Black Friday. Not the Friday 13 type of Black Friday with its spooky overtones rather a US shopping frenzy following their Thanksgiving Day celebrations.
But this one day shopping frenzy is not just an American phenomena.
Singles Day in China far outstrips the US in rampant buying. In the first two minutes of Singles’ Day this year, online sales reached $1 billion with Chinese consumers spending $33 billion in 24 hours with Alibaba. With 140,000 brands promoting their products at discounted prices on various e-commerce platforms, this year’s sales smashed last year’s record of $23.8 billion. To put this into perspective, the combination of online sales from the United States’ Black Friday (coming up today) and Cyber Monday, only amassed a total of $6.5 billion in 2016.
KPMG’s 2016 CEO Pulse Survey reveals online shopping festivals, and their associated bargains and promotions, are motivating shoppers in both mainland China (84 percent) and Hong Kong (52 percent) to purchase goods online, often in bulk.
There is a buzz in the days leading up to these festivals with customers placing items in their virtual shopping cart, preparing themselves for the mad dash to the online checkout. As soon as the clock strikes 12, the items are purchased with the click of a button.
And with the clock ticking for Black Friday in the US online tech publications like CNET accelerate the hype by publishing lists of where the best bargains can be found.
The trend is mobile
E-commerce sales in China and Hong Kong are predominantly driven by mobile phones, with a specific day, like Singles’ Day, most likely to spark an online purchase. Taobo, Alibaba’s most popular e-commerce shopping platform is used by 43 percent of mainland China and 45 percent of Hong Kong consumers. Outside of e-commerce platforms, consumers also use social media such as Facebook (Hong Kong) and WeChat (mainland China) to purchase and engage with brands.
Supply chain challenges
This year, on Singles’ Day, an army of workers processed and delivered 812 million orders. As part of their smart logistics practice to ensure faster delivery from stores and warehouses Alibaba leveraged big data with the first order delivered in less than 13 minutes of the purchase.
But overall, China’s supply chain industry is far from mature and demand for logistics services exceeds supply. With online buying pushed into a one day festival, logistics’ networks are bombarded with a high volume of online orders where consumers overbuy goods ranging from clothing to beauty products purely to compare items.
With a free returns policy, the cost to the supplier can double if the item is returned into the supply chain.
If the rumours are correct, Amazon will launch in Australia today. What this will bring to the Australian retail scene is still unknown, despite the conjecture. But one thing is sure,
with the global success of Singles’ Day, Black Friday and Cyber Monday, e-commerce businesses are on the rise, leveraging big data and innovative technologies to drive efficient and personalised customer service. As we move towards an automated world, robotics will start to replace manual handling to reduce the fulfillment bottleneck handling daily orders at triple the speed.
Consumer behavior is shifting towards using multi-channel facilities with customers expecting faster, adaptable and higher service levels with lower costs. To thrive in the e-commerce market, retail brands need to adapt e-commerce strategies, improve customer experience and create a consistent brand experience across the channels. Overall, the future of e-commerce looks bright.
Read the full report: Outlook for e-commerce in Hong Kong