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What Singles Day means for The Hut Group and other UK retailers

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China's Singles Day is approaching and could offer opportunities for UK retailers operating in one of the world's largest ecommerce markets.

Last year Chinese marketplace Alibaba alone took more than $9bn (£5.85bn) on Singles Day, November 11. When written down numerically – 11/11 – the date contains only the number 11/11 and in China has been dubbed Singles Day. This year the event is expected to be even bigger than last year.

Rachel Horsefield, managing director of The Hut Group's beauty division, says that Singles Day is a key date in its calendar.

“As a British online retailer, Singles Day is our biggest opportunity of the year to increase brand exposure not only in China, but with Chinese consumers around the world," she said.

"The numbers don’t lie – it’s the biggest 24-hour online shopping event on the planet, and while China’s economic slowdown will have an impact, we’re still predicting double last year’s sales for our business.

"China is one of The Hut Groups’ most important markets and critical to our Singles Day success is having the technical ability to handle huge volumes of traffic, to maintain our high-quality customer experience, as well as combing local market understanding with advanced data analytics, to create specific offers we know our Chinese customers will love.”

Melissa O’Malley, director, global merchant and cross-border trade initiatives at PayPal , says Singles Day presents a good opportunity British retailers to explore sales opportunities in China: the market is now worth, according to research from PayPal, Google and OC&C Strategy Consultants, nearly £100bn a year and is set to grow by 30% a year for the next three years to £130bn by 2018.

"British goods are in demand," says O'Malley. "The UK is the second most popular online overseas destination for Chinese shoppers, and when shopping for British goods online, they are considerably more valuable and loyal than their British counterparts. Chinese shoppers spend almost three times more in each online transaction, and repeat buy from the same UK retailer nearly twice as much."

She's says it's important for customers looking at the market to understand how Chinese customers prefer to buy, which includes through big retail holidays such as Singles Day.

Kurt Cavano, chief strategy officer at GT Nexus, says this year Singles Day is being promoted as an omnichannel event, as Alibaba encourages retailers to market the event and fulfil orders through stores as well as online, and reminding traders of the need to join up their channels effectively.

"It isn’t a case of prioritising stock for one channel over another," he says, "it’s about being adaptable enough to meet customer demand when and where it happens. With so much information on goods and orders residing outside the retailers’ own organisation – with their suppliers and partners – chances are they don’t have a complete view of inventory. To achieve true omnichannel capabilities and fulfillment, retailers have to break open siloed operations and collaborate across the entire supply chain."

Adrien Nussenbaum, co-founder of marketplace specialist Mirakl , advises that selling through a marketplace such as Alibaba can help UK retailers already trading in China and on the Alibaba website to boost their visibility and footfall.

He advises that retailers selling via Alibaba on Singles Day should remember that they need to have good quantities of stock available at a good price. "If European retailers want to sell a lot they'll say you need to merchandise, pay attention to the product description and to the experience around the shopping," he says. "But selling on one of Alibaba's sites has nothing to do with the sites we're used to in Europe. Everything is different, from the conversion funnel, the payment process, the way products are merchandised. That's also why going through Alibaba is also an opportunity for retailers not to think about how they should do it when they are selling on their own – but to focus on having the stock, the price, and to be ready to ship. It's a totally different approach to buying. If your objective is to leverage the Alibaba channel to sell on a super savvy Singles Day, focus on your processes more than on your appearance."

One business that is already reaping the rewards is British retailer Bells Shoes, which has seen online sales to China increase by 258% since they integrated PayPal’s China Connect programme. Sales to China now make up three quarters (76%) of Bells Shoes’ PayPal transactions, while the retailer's international sales dwarf those generated from its UK-based bricks-and-mortar store.

All of this matters not just this year but in the future, says Cavano, since retailers should consider that this event may in future gain ground in the UK.

“While Singles Day is predominately celebrated in China, there’s every chance we may see it gain ground in the UK," said Cavano. "After all, just a few years ago, Black Friday was a North American tradition – and look at that now! However, any UK retailer facing high demand peaks, be it through a celebrated shopping event or seasonal demand, needs to think very carefully about their omnichannel strategy.”

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