A short economic story about Single’s Day
Bella: Single’s Day is coming. There are many things I want to buy. I need to chop off my hands, otherwise I shall become a pauper.
Sophia: Me too, clothes, bag, lipstick and so on, all of those I want to buy. Taobao told me that the whole price would be reduced by 200 yuan if I bought 400 yuan goods, therefore I can’t stop buying.
Bella: Yes.Hi, Sophia.I find some magical things. If the whole price would be reduced by 200 yuan when we bought 400 yuan goods, we can just cost 400 billion yuan to buy Alibaba – a company which market value is 800 billion yuan at present.
Sophia：Wow, but we don’t have 400 billion yuan.
Bella: Hahaha, Borrow money from Ant Credit Pay.
Sophia：How to repay the huge debt ?
Bella: You silly! Alibaba belongs to us, why we repay the money to Ant Credit Pay (Ant Credit Pay is a financial loan platform of Alibaba).
Sophia: hahaha, it is amazing.We get Alibaba from nothing.
Origin and development of Single’s Day
Single’s Day, also known as Double 11 and often referred to in slang as Chop Hands Day, . refers to the online promotion day on November 11th every year. Single’s Day began as an online promotion day conducted by Taobao. They found the turnover far exceeded the expected results with limited number of merchants and promotional efforts. Finally, Single’s Day is a fixed date for promotion activity.
In response to becoming too addicted to the promotions, Chinese consumers started joking they need to chop off their hands to stop themselves from shopping. But of course, even then we would probably still not be able to resist the urge to buy buy buy.
It can be seen from Figure 1 and Figure 2, the sales and the number of participating merchants are increasing year by year on November 11th. Sales rose from 52 million yuan in 2009 to 268.4 billion yuan in 2019. The initial number of participating merchants is just 27, and now the number is up to 180000. Chinese e-commerce platforms, such as Taobao, Jingdong and Vipshop, compete in this carnival. There is no doubt that Single’s Day has become a national shopping festival in China. It reflects China’s strong domestic demand and the development of e-commerce.
How to consume on Single’s Day?
Behavioral economists say：The choices of consumption are infinite, while human rationality is limited. Under the onslaught of endless options, the brain’s rational thinking system tends to shut down, allowing the intuitive thinking system to take over. What is intuitive thinking? It is buy everything when you see it. So supermarkets and convenience stores pay close attention to how goods are placed. When people come into the supermarket, most people chose the goods placed on the right shelf, because most of them are right-handed. In the same way, the goods placed with the height of 1.5m – 1.7m on the right shelf must be the goods that the supermarket wants to sell most, this is due to the fact that the average height of Chinese men is 167.1 meters, and the average height of Chinese women is 155.8 meters.
Better to add a picture about the supermarket
In the same way, the goods on Taobao or Tmall’s home page must be what the merchants want you to buy most. Most of these goods are the most profitable or are overstocked for merchants, but those goods maybe not necessarily the one you need the most and the most appropriate.
Don’t get carried away by the urge to buy. Spend wisely.
Written by Dou Min