EXPERTS ADVISORY

Singles’ Day in China on Nov. 11 has become the world’s biggest online shopping day. Sales last year were twice that of U.S. sales on Black Friday and Cyber Monday combined. Faculty at the University of Michigan Ross School of Business are available to discuss:

Puneet Manchanda is a professor of marketing. His most recent work has focused on marketing strategy problems in social media and the pharmaceutical, high-tech, gaming and insurance industries.

“Even though Singles’ Day was established as a promotional tool only seven years ago, it has now become a fixture in Chinese e-commerce,” he said. “Its prominence has created two challenges. First, at the industry level, the expectations (in terms of sales growth) keep getting higher and higher. Second, for individual e-commerce companies, sales success or failure on Singles’ Day has large repercussions on their annual performance. In other words, overall expectation is that the e-commerce pie grows significantly and that each firm’s slice also grows. This puts a lot of competitive pressure on e-commerce merchants, both in terms of demand and supply.

“For consumers, on the other hand, the news is good. As firms compete to meet sales targets, the variety and depth of promotions available is significantly higher. An interesting trend is that consumer sentiment seems to be shifting towards buying from B2C sites (TMall, JD Mall) rather than C2C sites (Taobao) as the former are deemed more trustworthy.”

Contact: 734-358-7168, pmanchan@umich.edu

Jun Li, assistant professor of technology and operations, researches operations management and business analytics topics such as revenue management, pricing, consumer behavior, and economic and social networks.

“11/11 is a product of fierce competition in the retailing industry,” she said. “It is a blood battle among online retailers and now perhaps for many offline or O2O retailers as well. They took a huge hit in profits selling at lower-than-cost prices to fight for market share. Even so, it is hard to say whether consumers are the ones who eventually benefit, because a healthy economy is in the end what will benefit the Chinese consumers most. But as the competition begins to move from a pure competition on price to competition for speed and quality, that’s the point when the consumers truly benefit.

“I do believe the phenomenon itself is a testimony of rapidly growing economy, business model innovation and perhaps even more so, the growing confidence of Chinese people.”

Contact: 734-763-4612, junwli@umich.edu

Linda Lim, professor of strategy, is an expert on political economy of local and multinational business in Southeast Asia.

Contact: 734-763-0290, lylim@umich.edu