Although Singles Day isn't widely known outside of China, it has quickly become the biggest sales event in the world, outstripping Black Friday and Cyber Monday sales combined. Chinese e-commerce platform Alibaba (NYSE:BABA) is obviously the biggest beneficiary of the event since it was the company that took the unofficial holiday among the country's youth and turned it into a national -- and increasingly international -- phenomenon. But other retailers may just win big, too.
Single biggest event
Alibaba generated $18 billion in sales from Singles Day in 2016. To put that in perspective, online sales for Thanksgiving Day and Black Friday totaled $5.3 billion and Cyber Monday generated $3.45 billion, or about $8.8 billion total, and that's across all retailers. Amazon.com (NASDAQ:AMZN), which had its biggest sales day ever this past July during its Prime Day event, sold an estimated $1 billion worth of merchandise. (Alibaba hit that threshold in the first seven minutes of its sales event last year.)
Singles Day is huge, and the 2017 event, which takes place on November 11, promises to be even bigger.
The holiday, as it were, reportedly started as a way for Chinese college students to celebrate being single, with the festivities spreading beyond campuses to become a cultural phenomenon. The date when written numerically -- 11-11 -- represents "bare branches" in Chinese culture and is a way of saying, single men and women.
Alibaba saw it as an opportunity to boost sales, and in 2009, it launched its first Singles Day sales event, which was recognized as an overwhelming success that has only grown over time. Yet there are a number of U.S. retailers that will benefit from the event, as well.
Wal-Mart (NYSE:WMT), along with its partner JD.com (NASDAQ:JD), may be the next biggest beneficiary of this year's Singles Day sales. The two started their own one-day shopping event to glom onto the practice -- it was on August 8, or 8-8, a day of portent in China as the word for eight in Chinese and Mandarin sounds similar to "prosperity." They also agreed to merge their membership systems in China so shoppers can receive discounts and other benefits from both retailers, while also allowing JD.com to fulfill customer orders using Wal-Mart inventories. Wal-Mart has some 440 stores in China.
While Costco (NASDAQ:COST) has a storefront on Alibaba, just like many U.S. retailers do, it has benefited from Singles Day like few others. In 2014, for example, the warehouse club partnered with Alibaba to sell some of its merchandise on the site's Tmall e-commerce platform, China's largest business-to-consumer marketplace. It reported it was "shocked and surprised" when it sold $3.5 million worth of merchandise in one day. Alibaba subsequently made Costco a focal point of its "sell globally" initiative during last year's event.
Last year, luxury brands like Michael Kors, Kate Spade, Tapestry, Calvin Klein, and Neiman Marcus participated for the first time, offering discounts of as much as 60% off. This year, however, Alibaba is making a special push to highlight luxury during Singles Day and held a pre-event on October 31with a global fashion show on Tmall. It featured fashions from brands such as LVMH Moet Hennessy Louis Vuitton, Estee Lauder, TAG Heuer, and Ralph Lauren.
There are a number of other U.S. retailers that participate in the event every year, such as Macy's, Gap, and Target, though most don't offer deals to their domestic customers.
Coming soon to a retailer near you
I've argued that retailers ought to piggyback onto Amazon's Prime Day event to help boost sales, and they should, likewise, take Alibaba's motto to sell globally, as well, and run Singles Day promotions in the U.S.
The impact Black Friday is having on retail is declining over time, and Cyber Monday may surpass it for the first time this year. Pushing the start to the Christmas shopping season back a little further into November can spread the value out without risking alienating customers by hitting them up too early. After Halloween, consumers' thoughts naturally begin to push Christmas into the calculus.
Regardless of which retailers actually participate in Singles Day, and if history is any guide, Alibaba will likely have a sales promotion well north of $20 billion this year.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon, JD.com, and Tapestry. The Motley Fool owns shares of Michael Kors Holdings. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.