Singles Day 2021 Hits $75 Billion!

It’s fall and the start of the holiday shopping season. And once again, the world’s biggest shopping event has occurred. But no, it’s not Black Friday or Cyber Monday in the U.S. The biggest shopping day comes from the opposite side of the globe from the U.S. – China! Singles Day is held annually on November 11 in China.

Singles Day was originally started in 1993 by college students as a celebration for people who are single, chosen because of the connection between singles and the number ‘1’. Eventually, Chinese ecommerce company Alibaba forged an online shopping event in 2009 to take advantage of the interest, and the rest is retail history.

November 11 is now the globe’s largest shopping event. This year’s sales (stated as Gross Merchandise Value – GMV) reached $84.5 billion, an 8.4% increase over last year. (Note: GMV has no standardized way of calculating the metric.) The GMV reflects sales from November 1 – 11.

Singles’ Day has become an event on its own, including celebrities, fashion shows, TV galas, virtual reality, and augmented reality shopping, and it continues to expand to countries outside of China. However, this year’s event was slightly calmer as Alibaba faces the impact of Beijing’s scrutiny of technology companies and China’s “common prosperity” drive for the nation’s citizens.

Criticisms remain that Alibaba’s infrastructure outside of China is weak, particularly with respect to larger household appliances and items. It is developing international warehouses and improving its transportation efforts though as it seeks to compete with Amazon and other ecommerce companies in the west.

Highlights of this year’s event included:

  • Themes of green logistics, eco-friendly products, and consuming “with care.”
  • Gave out “green vouchers” for discounts on energy-efficient and low-impact goods.
  • Launched a dedicated eco channel that hosted 500,000 products from 2,000 merchants.
  • Offered to recycle packaging waste at 60,000 pickup stations across China.
  • Donated one yuan (16 cents) to charity every time someone interacted during the event with a social media post about charitable giving.

Why is it so important for global brands to enter this shopping day? Consider that there are roughly 300 million middle-class shoppers in China, rising to an estimated 500 million in the next 8-12 years. While Singles Day may have originally started for lonely Chinese consumers, the shopping day now is seen as critical to driving China’s – and the worlds – economy.

Group Activities and Discussion Questions:

  1. Most students will not have previously heard of China’s Single Day. Discuss the shopping holiday and its importance in China.
  2. This is likely the first time students have heard about Singles Day. There are a number of videos that can help explain the event:
  1. What is 11/11?  https://youtu.be/bRv9qG75x2c
  2. Evolution of Singles Day: https://youtu.be/CY_fE5EJZ-Q
  3. Discuss how this holiday compares to Black Friday and Cyber Monday in the U.S.
  4. Video report on 2020: https://youtu.be/iwHbvxd5Rqk
  5. WSJ video report: https://on.wsj.com/3olgSm8
  6. How should U.S.-based companies participate in Singles Day?

Source: CNBC; Forbes; New York Time; Wall Street Journal; other news sources

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Rebranding Facebook into Meta

Ask any marketer and they will tell you that rebranding a company is tough – and expensive. Once a company’s brand is firmly established, it has a value that carries to the company and all its products/services. Consider that a brand is the position a company holds in the consumer’s mind. State a brand name such as Nike, Tesla, or Google, and a specific image will quickly come to mind.

Let’s try it. “Facebook.” What thoughts and images did you immediately recall?

Now let’s try another name – “Meta.” Any thoughts?

Meta is the new company name for the formerly-known Facebook company. Why the shift? After all, Facebook is already one of the most well-known and valuable brands in the world.

To explain the change, Facebook/Meta CEO Mark Zuckerberg stated it this way: “We are a company that builds technology to connect…. But over time, I hope we are seen as a metaverse company.” The new name is designed to help the company (and its audience) transition from being seen primarily as a social media company into something much broader and more ambitious, encompassing the “metaverse.”

What is the metaverse? The term originated in science fiction from writer Neal Stephenson. It refers to a virtual space where people can do virtually everything from playing games, meeting with friends, attending concerts, and of course buying many different kinds of digital (and physical) goods and services. (Think “Ready Player One” or “Snow Crash.”)

In the past 15 years, Facebook has bought a whopping 78 companies in many areas of technology. The most well-known and valuable acquisitions are Instagram (acquired for $1 billion in 2012), WhatsApp ($19 billion in 2014), and Oculus VR ($2 billion in 2014). These acquisitions have helped the company expand using social media and advanced technology – most geared towards young users. They also set the stage for developing new services into gaming and the metaverse interactions.

Facebook has also been under intense pressure this fall after stories emerged about its calculated social media strategies and toxic handling of Instagram for teenage girls. Other issues that Facebook faces includes antitrust regulations and privacy concerns in the U.S. and Europe.

What does the future metaverse hold for us?

Group Activities and Discussion Questions:

  1. Discuss the importance and value of a strong brand.
  2. Poll students: Should Facebook rebrand? What does ‘metaverse’ mean to them?
  3. Show Meta website: https://about.facebook.com/meta/
  4. Ask students to define “metaverse.” What is its appeal to consumers?
  5. View a video from WSJ: https://on.wsj.com/3mnxucW
  6. Additional videos are available on Meta’s YouTube channel: https://www.youtube.com/channel/UC04FyDIvYXNecpbG8gyOw4A
  7. Discuss other corporate rebranding efforts such as Google’s rebrand to Alphabet.
  8. When does rebranding make sense for corporations? When should it be avoided?

Source: Forbes; New York Time; The Verge; Wall Street Journal; other news sources

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Hertz Bets Big on EVs and Tesla

Has the time for electric vehicles (EV) finally arrived? After all, EV automobiles are not a new concept and have been sold for many years by a number of auto manufacturers. But they have not yet taken off into a mass consumer market.

But now, EV sales are certainly growing with a large purchase of 100,000 Tesla cars by Hertz for a reported price of $4.2 billion. Showing support for the purchase is Uber, which committed to renting up to half of that order for its drivers. Consumers often state that a positive rental experience made them consider purchasing the model as well. The market for Hertz is not only current Tesla owners who want to rent Tesla when they travel, but also consumers who have wanted to test drive an EV Tesla for an extended period of time.

Current global market estimates are that EV market growth will go from roughly $246 billion in 2020 to $1.3 trillion by 2028. The growth is fueled in part by  the requirement to lower carbon emissions, as well as increasing fuel prices. However, a limiting factor is the low number of charging stations; mileage between charges continues to be a factor impacting sales.

A bonus for Tesla (aside from a sticker-price buy) is the advertising that Hertz will do for the rentals. Hertz is planning an advertising campaign with quarterback Tom Brady to promote EV rentals. The company will also install thousands of EV chargers at it locations globally.

Tesla famously does not purchase advertising, instead relying on its store-fronts, word-of-mouth, and the strong social media presence of Elon Musk  who has 54 million followers on Twitter.

Hertz also gains from the deal. It filed for bankruptcy in May 2020, but emerged from bankruptcy a few months ago, just as travel started to grow again in the U.S. After shedding old inventory during bankruptcy, the company is now poised to be one of the newest and most relevant car rental agencies.

Ready to rent?

Group Activities and Discussion Questions:

  1. View the Hertz news release: https://newsroom.hertz.com/2021-10-25-Hertz-Invests-in-Largest-Electric-Vehicle-Rental-Fleet-and-Partners-with-Seven-Time-Super-Bowl-Champion-Tom-Brady-to-Headline-New-Campaign
  2. A news video is available: https://youtu.be/gr6nLPUqzW0
  3. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
  4. For Hertz car rentals, break students into teams and have each team build a SWOT analysis grid.
    1. Strengths: What is the company good at?
    1. Weaknesses: What needs work?
    1. Opportunities: What is going on in marketplace?
    1. Threats: What should company be wary of?
  5. You might repeat the SWOT exercise using Tesla. What are the company’s strengths, weaknesses, opportunities and threats.
  6. Based on the analysis, what are the issues and risks that might occur for Hertz with its purchase of Tesla cars?
  7. Same question for Tesla: What are the issues and risks?

Source: Assoc. Press; CNBC; Fortune Business Insights; New York Times; Tech Crunch; Wall Street Journal; other news sources

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