Every Nov. 11 in China is Singles' Day, designated as a day to celebrate being unmarried. Last year on the holiday, online sales reached $4 billion—far surpassing, for example, the $1.5 billion in sales on Cyber Monday in the U.S.
The growth in online sales growth is driven by an expanding Chinese middle class buying apparel, accessories and electronics, but a larger question may be—who turned Singles' Day into a shopping juggernaut?
The answer is Internet giant Alibaba, which in 2009 used Singles' Day as a way to create Cyber Monday-like consumer hysteria in China.
The rise of the middle class in the developing world is intrinsically linked to increased consumer spending. Most measures of what defines a "middle class" count a rise in discretionary spending as a key factor—going back through historical middle-class surges, including the 19th-century Industrial Revolution. (Consider venerable British department store Harrods, established in 1848 to cater to the rising middle class rather than to the rich specifically.)
"The notion of having discretionary money to spend is a new phenomenon in China," said Homi Kharas, senior fellow at the Brooking Institute. "These are people who want to differentiate themselves and are brand-conscious. The middle class is prepared to pay more for quality than the lower classes," he added.
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After decades of official disdain for consumerism, the Chinese government is encouraging its citizens to display their prosperity, and Alibaba has seized the opportunity. This year, China is poised to pass the U.S. to become the world's largest e-commerce market. Last year, Alibaba—already China's largest online sales platform—generated $173 billion in sales.
That is more than eBay and Amazon combined, in a country where only 40 percent of the population is online. (Amazon operates in China through a local company, Joyo.com, and has gained less than 1 percent market share after eight years in the country.)
Now that conspicuous consumption is the official policy, the wealthy and mid-range consumers are snapping up luxury brands. China is expected to account for about 20 percent of global luxury sales in 2015, according to McKinsey Global Institute research.
While the very wealthy can shop for luxury goods on jaunts through Europe and the United States, the middle class, particularly those in smaller cities, use the Internet.