Macy's homepage on Tmall Global brings American products and holiday discounts to the Chinese market. Image: Macys.Tmall.hk.

E-Commerce Draws Chinese Consumers into US Black Friday Sales

China

The American holiday sales weekend that occurs just after Thanksgiving, from “Black Friday” to “Cyber Monday,” is gaining popularity in China. As the weekend approached in November of 2015, advertisements for foreign products appeared in subway stations and offices in major Chinese cities. Using e-commerce as a link between Asian consumers and US retailers has already proven to be a lucrative business strategy in South Korea, and both Chinese and American business owners are seeking to take advantage of a similar relationship. For Chinese consumers, e-commerce joint ventures between American and Chinese companies also mean easier access to foreign products that can be hard to find in China. The efficiency of third party payment platforms such as Alipay has helped to improve access to goods from abroad, while also bringing down transaction costs.

Black Friday sales figures in China are all trending upward. During this year’s Black Friday sales event, the number of people in China shopping abroad via e-commerce platforms increased by 700% from the previous year. Popular categories include niche products such as local food specialties and wines, as well as cosmetics and skin care products. Around 70% of the Chinese e-commerce shoppers were women. The number of Chinese consumers that shop online is also increasing, effectively doubling since 2009. With around 60% of China’s population now doing some shopping online, the value of that consumer base is evident from this year’s “Singles Day” sales event in China, the Chinese equivalent of Black Friday. On just that one day, Chinese e-commerce giant Alibaba handled transactions totaling $14.3 billion.

Black Friday sales numbers at brick-and-mortar US retailers were down nearly 12% in 2015, compared to the year before. Online retail remained strong, however, with reported sales up 14% from 2014. Taking this trend into account, the Chinese market potential has piqued the interest of American retailers. In the last two years, large American businesses such as Macy’s and Saks Fifth Avenue have forged partnerships with the cross-border e-commerce service Borderfree, an American company, which collaborates with the Chinese e-payment service provider Alipay. US bulk retailer Costco has also partnered with Alibaba to enter the Chinese market in an online-only format. These partnerships help US retailers overcome language, cultural, and payment barriers to reach Chinese shoppers more easily.

Macy’s also recently announced a free-standing joint venture with Hong-Kong based Fung Retailing Limited. The new entity, Macy’s China Ltd., will establish Macy’s e-commerce presence on Alibaba Group’s Tmall Global, making it the first US department store chain to join China’s biggest e-commerce platform. The partnership is still in a fledgling state, and as a senior vice president at Macy’s told Asia Matters for America, the merchandise available is limited and customer shipments will come from Hong Kong. The main purpose of the endeavor is to learn about Chinese customers and develop a retail strategy. Lessons learned there may help shape online strategies for Black Friday and other sales seasons in years to come.

Colby Ferland is a recent graduate of the George Washington University and a research intern at the East-West Center in Washington.