January 21, 2022
During an NRF Big Show 2022 session, executives from JD.com and Authentic Brands Group (ABG) discussed the huge opportunity that shopping festivals present in China and provided insight into their potential for retail in the United States.
the two best known Chinese shopping festivals are 6.18, held annually from June 1 to 18, and 11.11 or Singles Day, a 24-hour event held on November 11. On JD.com, the two days last year generated approximately $50 billion in gross merchandise value (GMV).
“If you’re thinking 6.18 or 11.11, that’s an excuse to go shopping,” said Nick Woodhouse, president and chief marketing officer at Authentic Brands Group, the brand management company. He compared it to how Valentine’s Day boosts flower sales in the United States.
One difference is that many other shopping festivals are held throughout the year, which doubles the number of shopping occasions in China compared to traditional shopping occasions in the United States, such as Easter, Halloween and Christmas.
The buying action is also driven by a Chinese consumer who is significantly more digitally savvy than even their younger American counterparts.
Harlan Bratcher, Global Business Development Manager, JD Fashion at JD.com, known as Jingdong locally noted that 90% of JD.com’s sales are made on mobile phones. Said Mr. Bratcher, “The Chinese are very, very mobile and digital.”
Aligned with this digital comfort, influencers are much more ubiquitous in China, driving discovery and purchases.
Deborah Weinswig, CEO of Coresight Research, who led the discussion, noted how shopping in China is similar to “entertainment and almost like a sport”, as well as on a very social level.
For U.S. retail, adding transaction-driven events to the retail calendar could produce greater pressure on margins, although many vendors are pushing limited-edition offerings or customized for Chinese buyers to fetch high prices.
In the United States, commercial events such as the 4th of July could extend over several weeks, as Chinese New Year. Existing festival days in China with global position including International Women’s Day, were also seen as having great potential in the United States “Any festival or shopping day that is not clearly created by a lobby, I think, has legs”, shelp Mr. Wooden house.
DISCUSSION QUESTIONS: Could mobile and influencer-driven shopping events that mimic Chinese shopping festivals take off in the US? How could they work differently?
“I think a similar situation could work out in the United States, but some things would have to change.”