Retailers view Singles’ Day as a test of relations
Singles’ Day, billed as China’s Black Friday, began in the 1990s as a joke among university students to celebrate their singleness but has since grown to become one of the world’s largest shopping holidays - and Korean companies are hoping to get in on the event.
Asiana Airlines will be selling tickets at discounted rates on Chinese e-commerce giant Alibaba’s website starting Saturday, the actual Singles’ Day. The discounts will be applied to all tickets from China to Korea.
The airline’s business was adversely affected when China banned tour groups from traveling to Korea earlier this year. The ban was the result of a diplomatic conflict between the two countries over a U.S. missile defense system in Korea known as Thaad, a system that China believes threatens its security interests.
Recently, the two governments indicated a thaw in relations when they announced promises of a rapprochement. With the Singles’ Day promotion, Asiana hopes to recoup some of their losses from the tourist dry spell.
“There haven’t been any visible demand changes yet, but we expect the travel industry in both countries will turn to growth,” said Ahn Byeong-seog, head of the airline’s China office. “We are planning to respond flexibly based on demand changes in China.”
Other retailers are also preparing massive promotions. Emart is offering 50 percent discounts on over 500 products sold on Alibaba. Gmarket is shaving up to 63 percent off prices on household and children’s products.
Duty-free stores, which were one of the largest victims of the Chinese tourism ban, also are stepping up their game, offering cash back or points to Chinese shoppers.
Singles’ Day is considered a must for Korean retailers, considering sales revenue last year was roughly $17.7 billion, nearly six times the sales revenue from Black Friday in the United States.
The online shopping event began as a small affair in 2009 when Alibaba started a sale on its Taobao website in connection with Singles’ Day. That year, it generated $80 million in sales.
This year, industry analysts expect $20 billion will be made through the event. As the influence of Singles’ Day continues to grow, major retailers like Japanese clothing brand Uniqlo have set up dedicated teams for the holiday.
“Singles’ Day is settling as one of the nation’s key economic events,” said Choi Yong-min, a researcher at the Institute for International Trade under the Korea International Trade Association. “Local enterprises must focus on creating channels to reach Chinese consumers and strengthen their position by making investments and devoting human resources to the event.”
Those in the duty-free industry are less optimistic about Chinese consumer demand for Korean products, especially since the Chinese government has yet to formally allow travel agencies to restart sales of group tours to Korea.
“It is hard to expect explosive revenue growth since only individual tours from China to Korea are available for the time being,” a source at Lotte Duty Free said. “Sales of duty-free items won’t see visible increases until the first half of next year.”
Still, they say the performance of Korean companies during Singles’ Day event could be a good indicator of how the recovery might progress in the future. In 2015, well before the Thaad fracas, Korean retailers made nearly $7.4 million in online sales from China during Singles’ Day. Skin care products were the top sellers.
Korea has ranked fourth in terms of earnings during Singles’ Day, after China, the United States and Japan. Fashion brand E-Land, kitchen appliances seller Hurom, kitchenware maker Lock & Lock and Emart are among the top performers.
Singles’ Day also benefits Korean customers because deals can be accessed through foreign sites. Last year, Alibaba offered smartphones for $100 and Nike sneakers for 245 yuan ($37). Hotel bookings and travel packages are sold at better rates.
The deals are typically found on foreign shopping sites, but experts warn customers should check product details and online reviews as fake goods are often traded on these sites.
BY KIM YOO-KYUNG AND CHOI HYUN-JOO [firstname.lastname@example.org]
More in Industry
[SHORTCUT] Is 2021 the year electric vehicles go mainstream?
Lobby groups call for leniency for Samsung's Lee
Thousands claim fraud after buying items via social media
No dial tone for 2G services on LG U+ starting in June
Ironing out an air corridor took decades