Started by Chinese eCommerce giant Alibaba.com as a kind of Valentine’s Day for the unattached to buy gifts for themselves, the annual Nov. 11 Single’s Day phenom has since grown into the world’s biggest sales event, generating an estimated $139 billion in just 24 hours last year.
For context, compare that to the $12 billion in sales registered on Amazon Prime Day 2022 and the commercial significance of Single’s Day comes into focus as a super heavyweight selling celebration.
Dominated by two Chinese marketplaces — Alibaba.com and JD.com — that kind of sales volume hitting in 24 hours has a lot of moving parts, in which payments play a critical role, doubly so because it’s something the entire Asia-Pacific (APAC) region enjoys, which means cross-border selling and the connections to keep all that money moving.
That makes it a big day for PSPs too, as Wei Jiang, president and chief operating officer at Citcon told PYMNTS in an interview right before Single’s Day kicks off on 11/11/22.
On this day of days, “It is very important for all the players in the ecosystem to not only be providing the best deals to the consumer but also make sure the platforms and the payments system are operating reliably,” he said.
Given that Single’s Day eCommerce traffic can be up to 100 times that of even a great day at any other time of year, Citcon is all-hands-on-deck keeping servers humming and approvals happening at a furious pace, putting intense focus on the checkout experience.
In addition to its core function as a gateway that clears 150 local and regional payment types, he said, “We provide advice to eCommerce merchants who probably do not have previous experience in this area, and also share best practices and the best ways to attract consumers.”
See also: The Emerging APAC Opportunity
Covering the Bases
One payment hurdle to clear on Single’s Day is the belief that “everybody has a Visa or Mastercard,” he said, calling it “the biggest mistake people make when they expand globally.”
Throughout the APAC region, penetration of these name-brand card rails is “very low” and without familiar local payment methods, sellers can miss out on a sizable chunk of business.
Jiang did the math, saying, “If you look at the conversion rate or the auth rate that the global card schemes get for cross-border purchases, the auth rate is somewhere around 60%. It is lower than the domestic authorization rate, which is over 90%.”
It’s a compelling case for payments localization and partnering with super apps like WeChat Pay, he said, adding that, “It is just a loss to the merchant without that capability.”
With its single application programming interface (API), Citcon offers “one reconciliation, one settlement, allowing the merchants to integrate once, and on the back end we provide over 150 different payment methods from the APAC region,” Jiang said. “It is more like a cloud service [in] that we will help in adding, deleting or switching payment methods the merchant wants without any maintenance.”
Not that he thinks sellers should show 150 options at checkout, local or otherwise. He said merchants “should prioritize and select which ones should be shown to the consumers from which region.” Citcon has a location-based smart routing solution that helps dynamically suggest the right mix of methods based on where consumers are.
See also: US Merchants Now Get 14% of Sales From APAC-Based Consumers
Go Your Own Way
As to how a year of runaway inflation and impending recession will impact Single’s Day sales this year, Jiang sees an opportunity for eCommerce players besides Alibaba and JD to shine, using Single’s Day promotions of those titans to drive traffic to smaller sites instead.
While it’s fine to go the Amazon route and sell on an Alibaba or JD digital storefront, Jiang sees Single’s Day as an opportunity for standalone eCommerce sites to boost their direct selling piggybacking the massive promotional activity and shopping frenzy in the air on 11/11.
“It is critical for merchants to have their own version of the Single’s Day promotion,” he said. “It is the best time for the merchant to attract new consumers to their website and create their own traffic. Don’t give away those opportunities.”
Also on the don’t list is don’t blow it at the checkout on the biggest sale day in the region. The study The Emerging APAC Opportunity, a Citcon and PYMNTS collaboration, found that merchants lose 52% of their APAC sales to cart abandonment. Here again, it’s about the mix.
Jiang said that means offering local and regional buy now, pay later (BNPL) options that gain popularity when money is tight, as it’s been for most consumers all year, worldwide.
“Klarna, Afterpay and Affirm are very successful in the U.S., Europe, and Australia. But there are many buy now, pay later solutions from the APAC area. China has its own buy now, pay later, Singapore has its own buy now, pay later. We offer all those solutions to the merchant.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More