Black Friday is the day following Thanksgiving Day in the United States. Since at least the 1930s, it has been regarded as the beginning of the Christmas shopping season in the US, when retailers offer big promotional sales. Its Wikipedia entry provides much more detailed information of this “epitome of consumerism”, but nowhere in the page mentions China.
The page should now be updated. In recent years, as more and more Chinese studying, working and immigrating overseas, the Chinese spending power is also expanding beyond the country. While there are more traditional forms of overseas purchasing through agents—usually the buyer’s friends and relatives or students who earn some money from the currency exchange rates, thanks to rising e-commerce platforms, an increasing number of Chinese are making the purchase through a few clicks at home inside China. In 2014, 1.8 million Chinese spent 140 billion yuan on oversea purchasing and the figure is expected to reach 1000 billion by 2018.
But behind the numbers, who and where are these Chinese spenders? What are they buying? What are some traits of Chinese oversea purchasing behaviours in this year’s Black Friday?
- Oversea purchasing is not an elite, upper-class activity any more. The market is expanding to average consumers, mostly female
It’s commonly perceived that only those with much extra money would follow Black Friday, Cyber Monday, Boxing Day and pay international shipping fee to make oversea purchases. And often time, they buy luxury items and brand product. This is simply not the case.
According to a Alipay report, the number of Chinese consumers shopping on Black Friday this year is seven times more than that of last year. 80 per cent of the orders came from first-time users. Meanwhile, the per capita expenditure in the 2015 Black Friday is 699 yuan, suggesting that oversea purchasing is becoming more popular among average people. Simply put, oversea purchasing is no longer a niche market but a common phenomenon in China. 70 per cent of the consumers are female. Likewise, fashion, cosmetics, baby product and health produce are the most popular items.
- While Tie-1 cities continue to spend most, tier-3 and tier-4 cities are catching up
It’s not surprising that consumers in Shanghai and Beijing spent the most on Black Friday, considering that they are two of the Tier-1 metropolises in China. In fact, one thirds of the goods purchased in Black Friday were shipped to Shanghai and Beijing. What investors and companies should take note is the speedily increasing consumer size in Henan, Shanxi, Hebei, Hunan, and Jiangxi, which is either Tier-3 or Tier-4 city that considered to be “economically less developed and spend less” than other large metropolises. Even more noteworthy is that Tibet exceeded Beijing and Shanghai as the city with strongest per capital spending power.
- Post-90s generation overtakes the middle-class as the mainstay of the overseas purchasing consumers
On WeChat and Weibo, it is usually young consumers that talk the most about what to buy or what they bought on Black Friday. With e-commerce or international shipping platforms such as DotDotBuy and Alipay Direct Shipping designed heavily for students and the like, the post-90s generation is perhaps the most active in these shopping seasons. Some of the platforms that my friends (all are from the post-90s generation) use frequently to follow news of and make overseas purchases are DealMoon (bargain news website), Shiliupo Report (fashion website and WeChat public account), Libeika Shijie (fashion blog and WeChat public account).
Last year, Alibaba’s revenues on Singles Day far surpassed the combined revenues of Black Friday and Cyber Monday, testifying again just how big China’s numbers are. Nowadays, these Chinese consumers are looking beyond the country and proactively joining the global market. It is time for oversea companies and investors to catch the opportunity and act back.