Photo: Reuters Archive
Lonely Hearts Day, created by e-commerce giant Alibaba ten years ago, has become an integral part of the Chinese calendar, as the hybrid between Black Friday and the Super Bowl on Sunday is a huge opportunity for marketers and consumers. The November 11th event is expected to be bigger than ever this year, but it will also be the headache that accompanies it, writes the Wall Street Journal in its analysis.
Merchants trying to come to the fore are investing in billboards and social networks to promote half-price sneakers and discount jewelry. State regulators, fearing what advertisers might do, have issued additional warnings against misleading and abusive advertising.
For hundreds of millions of customers, the huge challenge is simply keeping track of all reductions.
Looking for food coupons from Alibaba Group Holding and rival JD.com, Peng Young has joined 11 different groups in the WeChat chat application. The more friends she makes, the more coupons she will receive.
“I feel so addicted,” said the 25-year-old human resources consultant in Shenzhen, noting that she attracted dozens of people to do this. “Some of them probably find me very annoying,” adds the young woman.
According to e-commerce partner JD Fenxiang, buyers must be very thin in order to continue to send invitations to their friends. He also recommends sending complaints using private messages, rather than group chats, so as not to lose participants.
Lonely Heart Day was invented by Alibaba CEO Daniel Zhang, who recently took over as CEO after the departure of co-founder Jack Ma. The purpose of the event was to become a kind of counterpoint to Valentine's Day. His date was chosen because it is written in four units.
Lonely Heart Day helped Alibaba become the largest Chinese company, occupying two-thirds of the country's online trading market. Last year, revenue amounted to 30.8 billion dollars, which is 27% more than in 2017. This amount was higher than in US online stores on Black Friday and Cyber Monday combined. According to sources familiar with this issue, Alibaba plans to raise up to $ 15 billion this year through a secondary listing in Hong Kong shortly after Lonely Heart Day.
Other merchants do not want to miss the opportunity to participate in the obsession with Lonely Hearts Day.
“If you are a brand with any ambition, you should be involved,” says Dylan Kearney, managing director of Edge at Ascential Asia.
Although some brands reduce their prices by 50% or more, Kearney recommends that well-known companies rely on a reduction of 15-20% so as not to lose some of their prestige.
These are not just retailers trying to get the spotlight on Lonely Hearts Day. Evergrande states that it does not have a commission for houses sold that day.
However, regulators also intervene. The government has met with dozens of online companies in which Alibaba is concerned about competition during this period, warning against the use of problematic advertising and illegal activities.
The National Broadcasting Authority has asked local regulatory authorities to closely monitor advertising as well as advertising on the Internet.
Although it is expected that Alibaba will sell even more November 11 than last year, the outcome of the event will have some limitations in terms of its consideration as an economic indicator. Sales on Lonely Hearts Day actually started a week earlier, peaking on November 11th.
However, what is happening may be more indicative of current trends among Chinese consumers.