South Korean firms may not hit jackpot on China’s Singles’ Day
Businesses entering the Singles’ Day fray should let the Chinese consumers familiarise themselves with their brands first, says Korea International Trade Association
By Park Jae-hyuk
Most Korean firms are unlikely to enjoy increased demand during China’s Singles’ Day, Nov. 11, though they are desperate to hit the jackpot by preparing many promotional events.
Korean firms sold only US$7.37 million worth of goods at Alibaba’s Tmall China’s biggest online shopping mall on Singles’ Day last year, which was 0.05 per cent of the total revenue ―US$14.3 billion on the day, according to a Korea International Trade Association (KITA) report released Wednesday. The figure was low, considering that Korea covered 10.9 per cent of China’s imports last year.
KITA pointed out the problem is because small- and medium-sized businesses rarely supply their products to Tmall. Firms should submit dozens of documents and pay over 25 million won (US$21,764) to sell their products there.
During Singles’ Day last year, E-Land Group, a retail conglomerate which has more than 20 brands, posted 31.7 billion won (US$2,75,9770) in sales, the largest among Korean firms. “Our company expects to sell over 60 billion won (US$5,22,3540) on Singles’ Day this year,” E-Land China Chairman Choi Jong-rang stated in a press release.
Lotte Group, Korea’s No. 1 retailer plans to introduce various Korean goods through its e-commerce platform Global Lotte.com, and to give away gifts worth 33 million won (US$28,730) to 11 consumers, who bought goods at the Chinese website of the Lotte Duty Free Shop. The company will also hold large discount events in Korea, selling various products at Lotte Department Store’s online malls.
Large Korean cosmetics firms, on the other hand, did not benefit much from Singles’ Day last year, although cosmetics were the third most popular item during the event.
The two biggest ―- AmorePacific and LG Household & Healthcare - failed to rank in the top 10, having market shares below 1 per cent. They have promoted that they are leading the K-beauty fever in China, but L’Oreal and Olay were the only foreign firms among the top 10.
KITA said firms should let Chinese customers get to know their brands first, and then enter into the market with viral marketing and celebrity promotions. It added firms should continue to invest in the Chinese market, taking a long-term view.
Singles’ Day ― or “guanggunjie” in Chinese ― is the world’s largest online shopping day among young Chinese people, who celebrate that they are proud of being single. The date is chosen, as the number “1” represents a lonely individual.
It became the Chinese version of Black Friday in 2009, after Alibaba China’s No.1 e-commerce firm hit the jackpot during a large discount event at its open market Taobao. As other e-commerce companies joined the event afterward, the total revenue posted about US$14.3 billion in a day last year, which was double the combined total revenue earned on Thanksgiving Day, Black Friday and Cyber Monday last year.