Introduction  Singles’ Day, held annually on November 11, began as a festival of young Chinese people celebrating their pride in being single. Alibaba started promoting the day as a shopping festival in 2009 and officially named it the 11.11 Global Shopping Festival. Last year, the festival recorded a gross merchandise volume (GMV) of $30.8 billion on Alibaba’s platforms. This event is so important that merchants on Tmall, Alibaba’s B2C e-commerce platform, can sell as much in one day as they normally would in a month. We looked at last year’s results on Tmall and Tmall Global in two separate reports.  In this report, we continue our countdown to 11.11 to help merchants prepare for and make the most of the huge opportunity presented by Singles’ Day. We provide a guide for merchants to understand the timeline and what they need to do in the coming months to get ready. What Is the Timeline of the 11.11 Global Shopping Festival?  Companies must register to participate in Singles’ Day, and Alibaba starts the application process in August with a notice on the Merchants Center portal of Tmall/Taobao, which can be accessed only with a merchant account. (Merchants must be existing sellers on the platform to apply). The exact timeline varies, but merchants should start working with account managers as early as possible – many start as early as six to seven months beforehand. This is what we expect based on the 2018 timeline:

• Now: Companies should be planning Singles’ Day events, getting registered on Tmall and Taobao, reviewing Alibaba’s “Sales Activities Standard Rules” to ensure they will be able to meet them, and planning promotions, products, inventory and warehousing.
• Late August to mid-September: Application period: Merchants have to apply to participate and pass through a multi-layered vetting process. First, participating companies must meet the requirements outlined in the “Sales Activities Standard Rules” for each platform. Also, companies restricted by any penalty period that prevents them from joining a promotion event cannot participate. The platforms review merchants’ qualifications and confirm the list of participating merchants around mid-September.
• Late September to early October: Product registration for the pre-sales period: Merchants apply to sell the products they have selected for the pre-sale period, which usually starts from the last week of October until November 10.
• Mid to late October: Product registration for sale on Singles’ Day. Rules vary from one year to the next, but sometimes merchants are required to sell different products on November 11 than the ones they have been selling during the pre-sale period. Merchants might apply for an extension to sell the same products during the pre-sale and on Singles’ Day subject to the rules of the year.
• Late October to November 10: Pre-Sales Period. The preliminary round of sales and promotions starts, companies step up their marketing and promotional activities.
• November 11: The 24-hour 11.11 Global Shopping Festival officially begins.

What Are the Criteria Determining if Merchants Can Participate? Merchants need to apply to participate in the event and follow standards set out in the “Sales Activities Standard Rules” of Tmall, Taobao and Tmall Global (a cross-border B2C marketplace). Merchants are assessed as follows:

• Rules violations. Merchants on Tmall and Taobao can be penalized and given “points” (in this case negative points similar to points drivers in the US might accumulate on their licenses due to traffic tickets) for problems such as late delivery to more serious misconduct such as selling counterfeits:

o Tmall merchants cannot participate in the Singles’ Day event if they have committed any general violations of Tmall policies and accumulated 12 penalty points in the past 30 days, or 48 penalty points in the past 90 days as of the time of application. Or, if they have committed any serious violations and received penalty points in the past 30 days or accumulated 12 penalty points in the past 90 days at the time of application.

o Taobao merchants cannot participate if they have committed any general violations of Taobao policies in the past 90 days or any serious violations in the past year at the time of application.

• Performance assessment. In addition to ensuring merchants have not accumulated too many points or committed any rule violations that would disqualify them, they must also pass an assessment based on general performance, as follows:

o Basic service score: Tmall merchants get a basic service score based on five customer experience metrics in product, logistics, query handling, post-sales service and complaints. Each metric has a maximum score of 5 with weighting applied that varies by product category. The closer an overall score to 5, the higher the performance of a merchant. To participate in Singles’ Day, merchants must meet a minimum basic score requirement for the 30 days before a set date (which usually falls in late August) that varies from one product category to another.

o Detailed Seller Ratings (DSR): Merchants on Tmall Global and Taobao must meet a certain threshold of DSR to participate in Singles’ Day. The DSR is a score given by buyers whenever they complete a purchase, and the merchant’s total score is based on the average of three metrics: products match the description, service quality and delivery. Each metric carries a maximum score of 5 and the average score is based on the data collected over the prior six months.

o Length of operations on platforms: This measures how active merchants are on the platforms. Merchants on Tmall cannot participate in Singles’ Day if no transactions were recorded during the prior 180 days.

o Overall ranking: Finally, the platforms rank applicants using a holistic review of all the above performance scores, brand popularity, recent sales performance and the level of integrity (the platforms do not specify how they qualify some of these assessments). The overall ranking determines whether a merchant can participate in Singles’ Day, how many products the merchant can offer and if the merchant can be featured in major promotion pages.

To What Do Participating Merchants Need to Commit? Once merchants have passed the qualifying process, they have to make several commitments, including joining the platform-wide discount plan, buying logistics insurance and signing an overall promotion participation agreement.

Five Steps to Prepare

  Step 1: Set Sales Target and Plan for Traffic Before applying to join the Singles’ Day event, merchants will first need to think about their sales target and plan their budget for the event’s operations and marketing activities. Merchants can look into their average sales and promotion budget to come up with a sales target. After setting the sales target, merchants will need to think about how to draw traffic in order to hit their unique visitors target (a term commonly used in China’s e-commerce which is equivalent to the concept of conversion rate), and ultimately the sales target. Unique visitor value refers to the average sales turnover generated by a unique visitor. Merchants can estimate how much unique visitor traffic it requires to reach sales targets.  Then, a merchant can estimate the required unique visitor value to hit the sales target. Merchants need to understand how much traffic on Tmall or Taobao they can enjoy (for example, will they get a place on major promotion pages?), and how much additional traffic they need to redirect from other channels or create by content marketing and promotion strategies. Step 2: Plan Product Mix and Prepare Inventory and Warehousing  Since the overall ranking impacts the number of products a merchant can sell on Singles’ Day, it’s important to understand the ranking system and start working to push the ranking up ahead of the application deadline. Last year, some low-ranking merchants could sell only three products and were not allowed to join the pre-sales period. Merchants with sufficient data can review their sales record to determine which products to promote and what will be their most competitive offerings. Merchants should ideally have 20-40% more inventory than their sales targets to ensure timely access to products to meet increasing consumer expectations of same-day delivery. Merchants operating on the cross-border e-commerce platform Tmall Global need to ensure their products arrive in China in time, and should bear in mind that imported products will be stored in bonded warehouses and clear customs only after a customer buys them. Step 3: Formulate Plans to Drive Traffic and Conversion Merchants need a plan to drive traffic to their online stores during the pre-sales period. Some of the common ways to draw traffic include:

• Shopping subsidy: Offer product or store discounts in the run up to November 11 to attract shoppers. Retailers should also remember they are compelled to join the platform-wide discounts plan on November 11, and that customers can place orders before Singles’ Day and still get the discount if they make payment during the sale day. Merchants usually have to absorb these costs.
• Promotions/advertisements: Ads on e-commerce platforms can drive traffic. Advertising costs are determined by click rates, number of products sold or the price of a designated display space. Merchants can also adopt an omni-channel approach with offline promotional campaigns.
• Content marketing: Merchants can leverage features on Tmall and Taobao to generate shopper interest, such as livestreaming, short videos, interactions with store followers and user-generated product reviews.
• Storefront design: Merchants can redesign their store pages for the event to generate consumer interest.

Step 4: Get the Backend Ready Robust backend preparation is key to ensuring a smooth customer experience – and to convert more traffic to sales:

• Text and visuals: Tmall and Taobao have strict rules about promotional materials, product descriptions and visuals. Merchants should make sure offerings and store pages do not contain any prohibited texts or images.
• Customer service: Merchants should prepare customer support, bearing in mind that volumes will surge dramatically in a very short time (one day), ensure preset automatic replies on the instant messaging platform Aliwangwang are ready and that Q&As address as many questions as possible to drive down incoming queries.
• Logistics: It’s important to plan delivery well in advance of Singles’ Day – and finalize firm and clear SLAs with logistics partners for Singles’ Day. Alibaba has strict rules requiring prompt delivery during Singles’ Day: Last year, the company required participating merchants to have Singles’ Day orders ready for shipment no later than 11:59 pm on November 14. Alibaba also often requires participating merchants to offer free delivery on Singles’ Day.

  Step 5: Closely Monitor Pre-event Activity for Insights into What to Expect on Singles’ Day Merchants need to be ready for a surge in demand coming quickly and on one single day. To prepare, companies can closely monitor what is happening in their online channels in the pre-sales promotional period to glean insights into what to expect on the actual day. Key Insights Singles’ Day has emerged as the world’s largest shopping festival – bigger than Black Friday and considerably bigger than Amazon Prime Day. It represents a key opportunity for retailers to raise consumer awareness of their products, drive engagement and even for companies new to China to break into this fast-growing consumer market. But preparation is important: Western retailers need to know the rules, the market characteristics and how the two main online players work with companies on the day.