Growth

The Aussie businesses making the most of China’s $20 billion Singles’ Day

Eloise Keating /

The growing appetite for Australian products among Chinese consumers was on display last week as millions of shoppers took part in Singles’ Day.

Singles’ Day is a Chinese celebration held on November 11 every year and it’s all about single people buying presents for themselves.

The day is thought to have originated in the early 1990s from a celebration at Nanjing University of “bachelors’ day” and was later expanded to the more inclusive “singles’ day”.

Chinese retail giant Alibaba has transformed Singles’ Day into the world’s largest shopping event and this year’s event again saw shoppers part with billions of dollars.

Alibaba processed $US5 billion ($7 billion) of sales through its Chinese and international retail marketplaces in the first 90 minutes of the shopping event, with 72% of those sales done on mobile devices.

Overall, Alibaba’s sales amounted to US$14.3 billion ($20 billion), which compares to $US9.3 billion on Singles’ Day the year before.

Global brands including Zara, Uniqlo, Burberry and Estee Lauder all participate in the event and Australian businesses are also throwing their hats in the ring.

Australian pharmacy chain Chemist Warehouse only started selling vitamins and other products via Alibaba’s Tmall platform from the start of the month.

It said last week it broke several Alibaba records, including being the fastest retailer to sell 1 million yuan of product, which it did so in less than three minutes, according to Fairfax.

Meanwhile vitamins from Blackmores were also reportedly in high demand and a local shortage of infant formula from Bellamy’s Organic was blamed on increased demand in the lead up to Singles’ Day.

But several smaller retailers are also using the partnership between Australia Post and Tmall to pick up a piece of this lucrative pie.

 

A “smart move” for Bellabox

Sarah Hamilton, co-founder of homegrown beauty subscription service Bellabox told SmartCompany Singles’ Day led to a 200% uplift in sales.

Bellabox only started selling its subscription beauty boxes into the Chinese market via Tmall at the beginning of October but even off a small base, Hamilton says being part of Singles’ Day has “definitely had an impact”.

“We’re really happy with how it has gone,” Hamilton says.

“We’ve done a lot of work targeting influencers in China as it is a marketing method that has worked well for us in Australia. We have 20 posts from different influencers in October, including a number of posts before Singles’ Day.”

Bellabox found its influencers by researching beauty blogs and other brands in China and then targeted influencers with highly engaged social media fan base, not just those with the most followers.

While Hamilton says the Bellabox team put in a “huge amount of work” in terms of research and preparation before entering the Chinese market, she says the team will be even more prepared for Singles’ Day in 2016.

“Globally I think everyone should have a Singles’ Day sale,” she says.

“To ignore it would be kind of a bit silly.”

Hamilton says next year Bellabox may opt to offer bespoke boxes for shoppers to buy on Singles’ Day and will be making sure it has plenty of products available on the day.

“A large number of people pre-prepare by putting products in their shopping cart and then wait for the discounts,” she says.

“We did most of our sales first thing in the morning when they converted their carts.”

Bellabox, which was founded in 2011, currently boasts a total subscriber base of more than 40,000. Australian customers pay around $15 for their monthly selection of beauty samples and based on this figure, SmartCompany estimates Bellabox’s turnover to be around $600,000 a year.

The subscription retailers has raised more than $7 million in funding to date, with investors ranging from Allure Media to SquarePeg Ventures.

Hamilton says she recommends other Australian brands consider entering the Chinese retail market via a platform such as Tmall “100%”.

“Especially given where Australia is geographically located,” she says.

“We know Chinese consumers like Australian products … every company will makes its own decision but it’s worth researching. It’s a smart move.”

“Australia is not the US, we have a small population, so why not take advantage of the proximity?”

“Chinese consumers love Australian products”

Frank Granziera from Sydney-based Olive Oil Skin Care Co, told SmartCompany Singles’ Day continues to generate sales for his company’s skincare range.

Olive Oil Skin Care Co was one of the first local businesses to begin selling its products into China through the Australia Post and Tmall partnership around 18 months ago and Granziera says the company’s profile has grown steadily since.

“Singles’ Day has always been doog,” he says.

“We’ve got a pretty good profile now and it just keeps going.”

The Olive Oil Skin Care Co grows its own olives and has been manufacturing its range of olive oil-based skin and hair care products for around five years. The business employs a staff of 10.

For Granziera, the market for the company’s products in China is only set to grow, thanks to what he describes as a “rise in consciousness” in China about eco-friendly and sustainable products, especially among younger shoppers.

And for these shoppers, Australian-made products appear to be ticking all the boxes.

“Chinese consumers love Australian products,” he says.

“They love the ‘Australian made’ triangle, it’s a passport to good quality products.”

Granziera says there is a perception among consumers in China that Australia is pollution free, Australian-made products are subject to strong regulation, and Australian businesses are honest.

“It’s a huge endorsement for our products,” he says.

Teaming up with Tmall and Australia Post to enter the Chinese market made sense for the Olive Oil Skin Care Co, says Granziera.

“It’s an innovative process, a sales platform as well as a delivery platform,” he says.

“Behind the scenes you have the machinations of Australia Post, which means the products are delivered on time.”

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.