Single’s Day has become a huge commercial success, and retail analyst Shaun Rein explains why luxury sales will boom thanks to e-commerce: for many Chinese the luxury stores are just too far away, he tells in CNBC.
This year, online sales from the holiday are forecast to hit around USD 5 billion, according to China Market Research Group, 20 percent higher than 2012. This compares to USD 1.5 billion in sales during Cyber Monday last year, which are expected to touch nearly USD 2.3 billion this year, according to Adobe.
“Singles Day has become a hugely important day for retailers. The discounting today has been the talk of consumers, from millennials to 40-year-olds. Aside from Chinese New Year, this is becoming one of the key days for retails to launch promotions,” Shaun Rein, Shanghai-based managing director of China Market Research Group, told CNBC.
“Above and beyond singles, everyone knows that it is a day of great deals. Chinese youth are getting more frustrated because of rising real estate costs so they are shifting to purchases that make themselves happy,” he added.
Chinese are more excited about e-commerce as they can buy products that are not sold in brick and mortar stores near their homes, said Rein. The profile of an average online shopper is a young, middle-class consumer living in a tier-two or tier-three city, who often lack a wide variety of retail choices.
E-commerce players such as China`s biggest e-retailer Alibaba Group , which operates websites such as Tmall and Taobao, are standout winners of the online sales bonanza. Taobao specializes in consumer-to-consumer commerce similar to eBay, and Tmall links small and large businesses and brands to consumers, like Amazon Marketplace.