SHANGHAI– Oct. 27, 2021 – Throughout the COVID-19 pandemic, the retail landscape in China has experienced several key shifts. While gross merchandise value (GMV) remains an important measure of success, retailers have an opportunity to reach for a new definition of success this Singles Day, one that’s anchored in customer loyalty as well as customer acquisition. By prioritizing metrics like customer lifetime value and Net Promoter Score^SM, executive teams can start building a more sustainable and defensible proposition for the long term, a shift which will help retailers win throughout the year, not just on the biggest day in the global retail calendar.

These are among the findings of Bain & Company’s second annual Singles Day report, China Retail: A New Definition of Singles Day Success, based on a survey of 3,000 Chinese consumers and done in conjunction with technology company Toluna.

Of those surveyed, 95 percent of respondents said they intended to take part in the event again in 2021. 52 percent also said they were planning to spend more than last year, when the average spending per customer was RMB 2,104, while only 8 percent said they were planning to decrease their spending. Women were more likely than men to be anticipating a bigger outlay during the festival in 2021.

Some key trends that fueled GMV growth last year appear to be continuing. Penetration in lower-tier cities is likely to increase again and breach a symbolic threshold: our consumer survey suggested that there will be more first-time Double 11 participants from Tier 3, 4, and 5 cities this year than from Tier 1 and 2 cities. A pandemic-related surge in spending on wellness categories is also likely to carry over from 2020 to 2021, especially in cosmetics and personal care. Overall, many Singles Day shoppers say they still strongly prefer brands that are familiar but are open to accessing these brands via a variety of platforms.

“For many consumers, Singles Day discounting hasn’t fostered loyalty to a single platform; spoiled for choice, they prefer to shop around,” said Jonathan Cheng, a Bain & Company partner who leads the Greater China Retail practice and co-author of the report. “However, retailers that dig deeper are likely to find a subset of users that count as genuine fans. These customers can be the bedrock of renewed strategic differentiation. Our survey suggests that a retailer who captures and delights new customers on Singles Day tends to keep them as loyal customers throughout the year.

To accelerate their transition to a loyalty-led model, executive teams might find it helpful to consider three groups of questions that venture well beyond November 11:

• How much does our approach to Singles Day feed into the bigger picture? Do our Double 11 deals target our most valuable customers? How is our Singles Day proposition evolving beyond functional elements to generate loyalty?
• Are we truly putting loyalty at the heart of what we do? Do we measure and track customer lifetime value systemat­ically? How well do we know our most valuable customers and how they interact with us? How satisfied are our customers across key touchpoints?
• Are we reshaping the business to dial up differentiation and ease reliance on promotions? Is investment targeted to the most valuable customers? Will it deliver a year-round benefit, not just during sales festivals?

“Retail in China is approaching a point where there can be no growth strategy without a loyalty strategy and leaders will have to rely on a broader range of metrics than GMV, monthly average users, and average revenue per user,” said James Yang, a Bain & Company partner in the Greater China Retail practice and co-author of the report. “They’ll need to judge themselves against benchmarks such as Net Promoter Scores, customer reten­tion, operating profit, and customer lifetime value. Retailers should think beyond just Singles Day to invest in winning during a broader spread of events across the year.”

Editor’s note: To receive a copy of the report or arrange an interview with Mr. Cheng or Mr. Yang contact: Calla Payne at calla.payne@bain.com or +852-6020-7693.