2016’s total revenue during the 11.11 Global Shopping Festival reached 180bn yuan (26.1bn dollars, 24.5bn euro) according to Sun Jiwen, spokesman for the Ministry of Commerce, reported China News. During the 24-hour online shopping event, where retailers offer special discounts, people purchased a wide range of products, including holiday packages for the upcoming year. During the event the average price of holidays sold by Ctrip, China’s largest travel agency, exceeded 10,000 yuan (1,451 dollars, 1,365 euro), for the first time, a +9.9% increase compared to last year, reported NetEase. Among the purchases, 60% were overseas holidays and 83% were luxury or high-end holidays. On Fliggy (formerly Alitrip), holiday revenue reached 2.1bn yuan (300m dollars, 287m euro) during the festival, with over 70% comprising overseas holidays, according to China News. On Mafengwo, the largest Chinese travel bulletin site, overseas travel accounted for 83% of total sales during the shopping event, reported Dotour.

Tmall, a business-to-consumer platform in the Alibaba Group, was the leading retailer for this year’s event, with 120bn yuan (17.4bn dollars, 16.4bn euro) in revenue, a year-on-year growth rate of +32%. Sun Jiwen highlighted that customers from fourth-tier and fifth-tier cities as well as countryside areas had become the driving force for the increase in revenue. According to Sohu, the third largest web portal in China, traditional first-tier cities (Beijing, Shanghai, Guangzhou and Shenzhen) accounted for only about 17% of the overall spending on Tmall during this year’s shopping festival, which means over 100bn yuan (14.5bn dollars, 13.6bn euro) of revenue came from other cities, showing the significant spending power of cities beyond the first tier.

Chinese passenger growth in three major first-tier aviation hubs (Beijing’s Capital International Airport, Shanghai’s Hongqiao Airport, and Guangzhou’s New Baiyun Airport) has slowed down in the last three years, according to tourism data analysis by the China Business Journal. The journal identifies flights and aircraft runway saturation as the main reason for the slowdown in traffic, meaning the airports are unable to carry more passengers or launch new routes. Meanwhile, airports in Chongqing, Kunming, Xi’an, Hangzhou, and Nanjing have showed double-digit percentage increases. According to data released in July by the Civil Aviation Resource Net of China, 244 new international routes were approved by the Civil Aviation Administration of China in the first half of 2016, 63% of which were from second-tier and third-tier cities.

Global brand perspective

While overseas travel was a dominant sales trend to note for this year’s Singles’ Day shopping event, the global reach that Alibaba now offers is hard to ignore for western brands with their eye on marketing to Chinese consumers. According to Digiday, more than 14,000 foreign merchants participated in Singles’ Day promotions on Alibaba-owned online stores Tmall and Taobao this year, and, combined, they accounted for more than 30% of Alibaba’s overall Singles’ Day sales. First-time participants included Shanghai Disneyland, Burberry, Sephora, Apple and Victoria’s Secret.

Global Blue takeouts:

● Cities beyond the first tier have great spending potential, as shown by recent 11.11 Global Shopping Festival sale figures.

● Overseas holidays make up a large proportion of travel packages sold during the 11.11 Global Shopping Festival.

● With over 100 new international routes connecting these cities to overseas destinations, their buying power will be moving abroad.

● Luxury brands such as Burberry, Sephora and Victoria’s Secret are participating in Singles’ Day promotions to market to Chinese consumers at scale.