Bigger than Chinese New Year

Have you checked your calendar today? Do you know what day it is?

Many of us living in America look at November 11th as any other day on the calendar. Many people are also celebrating Veterans Day.

But in China, they are celebrating Singles Day.

One might ask, what is Singles Day? Singles Day is a holiday invented in the 1990’s in response to Valentines Day. Instead of promoting love for one another, the Chinese created an anti-love holiday promoting the single life. It is celebrated on 11/11 because of the connection between singles and the number ”1”. In 2009, China’s largest e-commerce company Alibaba Group had a vision and took a new interest into this holiday. They morphed it into a multi-billion dollar e-shopping holiday (similar to Black Friday). It turned into the greatest 24-hour cyber-spending blitz in the world because of the deep markdowns.

This holiday hasn’t always been about shopping. Below is a graph showing how much sales have grown for Alibaba’s e-commerce sites Tmall and Taobao Marketplace after reinventing this holiday in 2009. Alibaba was able to improve sales drastically by using quality to improve profitability. By reducing costs for one day and increasing productivity, we see profit increases.

Screen Shot 2014-11-10 at 11.05.16 PM

American consumers spent $2.9 billion last year on Black Friday and Cyber Monday combined, compared to Alibaba totaling $5.8 billion in sales on Singles Day.

As we learned in class, quality is subjective, and perception is reality. This holiday was spread only by word of mouth. How crazy is it than within only three years, Singles’ Day has become the biggest 24-hour shopping event in the world? Alibaba turned it into a Hallmark Holiday and is now sweeping the market. Their stock is currently up 4.59 on the NYSE.

With this busy of a day, one thing that needs to be taken into consideration is inventory management. It is crucial to have a management team dealing with inventory related costs. Similar to Black Friday/ Christmas time having seasonal employees, do you believe they should have seasonal positions for Singles Day? Or it is not necessary similar to Valentines Day not having extra added employees?

Positions needing extra help begin with setup / ordering costs. Preparing purchase orders and managing inventory is essential to stay organized. Delivery charges are also another thing needing to be tracked. Holding / carrying costs will also need to be managed, along with shortage costs. This might all seem simple, but with $5.8 billion in sales in one day last year, these are a lot of things to keep track of and manage.

Leaving you with a few questions, how likely are you to participate in a Hallmark Holiday like Singles Day or Black Friday?

Does working on a management team during a day like this sound appealing to you?

What difficulties would you find in the management area of working on a day like this?

 

 

http://money.cnn.com/2014/11/10/investing/alibaba-singles-day-china/index.html?iid=A_MKT_News

http://www.businessinsider.com/singles-day-is-chinas-cyber-monday-2014-11

http://www.marketwatch.com/story/alibabas-singles-day-bigger-than-black-friday-2014-11-10

3 thoughts on “Bigger than Chinese New Year

  1. Great article. If I had money and time, sure I would participate in Single’s Day and Black Friday. The only annoying part would be the crashing online and in real life at the stores.

    Working on the management teams on these days would probably be very stressful unless they forecasted right and brought inventory ahead of time. I am not sure though about these holidays being contained in one day though, in a business perspective, it would be better to spread it out though multiple days. I guess that is why some stores have the Black Friday sales on Thanksgiving, though it takes away a little bit from being thankful for what you have. I guess if you really want something, you just got to have it.

  2. This is definitely an interesting read! I had no idea that a holiday like this existed. Personally, I probably won’t participate in Black Friday mainly because I don’t need anything badly enough that I will go out in the cold for it. Also because working in retail has made me aware of what clerks go through, so if I were working in management, I would dread this kind of day. Managers have oversee the madness that goes on and that isn’t something I’d want to do.

  3. This was an outstanding article, my parents have actually invested in AliBaba stocks so this was a very interesting read for me. I did not even know that Alibaba has been around for that long, also had no idea that Singles day was a holiday, but I enjoyed reading and learning these new things. But as for working with management, I have worked as a sales clerk and i have seen what my manager goes through and thats something I wouldn’t mind to do, but definitely if I had a choice I would probably not want to do that.
    -Jay

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