Every year, the first Friday after Thanksgiving marks the popular shopping day known as Black Friday, where retailers compete with one another to offer the best discounts and customers do the same to claim coveted deals in-store. Black Friday has since evolved, moving into the online space to cater to increasing eCommerce growth. This has also led to Cyber Monday’s popularity (first launched in 2005), the equivalent of Black Friday but focused purely on eCommerce.
According to a report by IBM in 2014, Cyber Monday remained the busiest day for online shopping over the five day period (Thanksgiving to Cyber Monday) in the US. In 2014, Cyber Monday saw overall online sales jump by 8.5%. Mobile sales, which account for 22% of all Cyber Monday sales, also increased by 27.6% compared to figures in 2013. While Thanksgiving is traditionally celebrated in the US, the spread of Black Friday and Cyber Monday have gone far beyond the US market. In a 2013 report by eCoupons.com, Black Friday and Cyber Monday shoppers from outside the US market also began increasing in 2013, accounting for nearly USD $125 million or 5% of total sales figures.
Asia Pacific is Anything But Cold Turkey
Existing sales figures from eCommerce events such as China’s Singles Day are a good indicator of Asia Pacific’s potential for Black Friday and Cyber Monday. On November 11 2014, Singles Day sales hit USD $9.3 billion – that’s bigger than US sales of Thanksgiving through Cyber Monday combined, indicating a massive opportunity for retailers looking to boost sales during this period.
Some US retailers like Saks Fifth Avenue, Bloomingdale’s and Macy’s are already recognizing Asia Pacific’s potential. For this year’s Black Friday, these retailers teamed up with Alipay, China’s largest third-party payment service, to offer payment via Alipay’s ePass on their eCommerce sites in a bid to reach out to the Chinese market which prefers online payments in Yuan.
Shopping-crazy Singapore also reported growth in sales for Black Friday and Cyber Monday this year. According to a 2014 survey by Harris’s Online Poll, Singaporeans love a good bargain. With 20% of respondents saying they would buy a product just for the reason of it being on sale, the appeal of events like Black Friday and Cyber Monday is clear. Luxury department store Robinsons also saw hordes of shoppers queuing up outside stores even before opening hours on Black Friday. According to spokesperson, Robinsons is now considering holding the sale every year given that sales in 2014 increased by 400% compared to Black Friday in 2013.
In the online space, retailers like Zalora, Lazada, Qoo10 and Taobao also joined in the sales promotions. Zalora offered an exclusive Black Friday promotion this year, with discounts of more than 80% when shoppers used a promo code BLACKOUT during checkout. Online Revolution is a regional shopping festival in Southeast Asia, which sees retailers like Lazada and Zalora offering discounts from 12% to over 80%.
In December 2014, SingPost eCommerce, which supports more than 1000 eCommerce clients and manages and runs eCommerce sites for global brands across Asia Pacific, reported significant growth in traffic and order volumes. From the period of Thursday (Thanksgiving Day) through to Cyber Monday, its participating sites saw a 10 fold increase in order numbers, 11 times increase in revenue and over 5 times more visitors, compared to the same period in 2013.
Key Trends To Note From 2014
Mobile Is A Must-have For Cyber Monday
In 2014, Cyber Monday mobile traffic accounted for 41.2% of all online traffic in the US. For retailers looking to enter Asia Pacific, they can expect this trend to continue given the region’s high smartphone penetration rates. As of 2013, smartphone penetration in South Korea was 73%, Singapore was at 72%, China at 47% followed by Thailand at 31%. With smartphones being the primary device for internet connection for many Asian shoppers, brands should think about how to leverage mobile commerce for online shopping festivals like Black Friday and Cyber Monday in 2015 and beyond.
Leveraging the Influence of Social Media
A 2014 report by IBM saw Facebook and Pinterest driving Cyber Monday sales in the US. In Asia Pacific, the influence of social media is even stronger, especially since the region is home to some of the world’s most socially connected markets such as Singapore, Malaysia and Indonesia. In Malaysia, 51% of online purchases start from Facebook, according to an e27 report. In 2014, 26.4% of online sales in Indonesia came from social media channels. Given that Asians are so active on social media, it is critical for retailers to leverage social commerce to boost sales during this period.
Given that Black Friday originated as a sale day for Brick-and-Mortar retailers, consumers will still expect great discounts when shopping in store. However, as increasing number of shoppers move into the online space, retailers must ensure they have a multi-channel strategy. Even in countries like Singapore and the Philippines, which are strongly driven by a mall culture, reaching customers at multiple touch points is key to creating a seamless shopping experience across all platforms.
Think Global, Act Local
Cross border commerce is another key sales driver as consumers develop preferences for more international brands not usually available in their local markets. However, offering consumers products from the international catalogue is not the end goal. Retailers need to consider how to make such international orders as seamless as possible by catering to local preferences. This includes building localized sites as Amazon did in China when it launched Chinese-language websites and offered payment options in the local currency. Other US retailers have also started catering to the Chinese market by offering payment options, such as Alipay’s ePass, allowing Chinese shoppers to buy goods in Yuan, during this year’s Black Friday sales.
A report from Korean Customs Service stated that South Koreans spent more than USD $1 billion on cross border eCommerce in 2013, a 47% leap from 2012. Global delivery services should therefore be a key consideration for retailers to reach these international customers.
Shopping festivals such as Black Friday and Cyber Monday are significant drivers of growth for the global eCommerce sector. The growing sales figures in the US are also being reflected in Asia Pacific. Increased smartphone penetration and growing demand for international goods are creating opportunities for retailers in the region, which will soon contribute to 40% of total global consumption. Reaching out to Asian consumers during such online shopping festivals is only the tip of the iceberg as the region’s consumer spending is forecast to grow year on year. Black Friday may have its roots in the traditional western celebration of Thanksgiving, but its growth potential and that of Cyber Monday, is undeniable for Asia Pacific, both online and offline.