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Winter is an eventful time of the year; especially in the western part of the world due to holidays like Thanksgiving and Christmas. But in the last decade or so, this festive season has become one of the most sought-after shopping seasons due to the development of global shopping bonanzas such as Black Friday, Cyber Monday and Singles Day. After widespread momentum, robust consumer spending throughout the year to date suggests that the 2018 holiday season is poised for strong retail sales growth across channels. For the first time, holiday sales are set to cross USD 1 trillion, showing significant growth since 2011. The latter is in part due to the maximum 32 day gap between Thanksgiving and Christmas. According to CNBC, 2018 witnessed the greatest holiday sales figures in 6 years.Holiday sales are set to cross USD 1 trillion, showing significant growth since 2011 Click To Tweet
According to CNBC, 2018 witnessed the greatest holiday sales figures in 6 years. Click To Tweet
According to eMarketer research, 2018 holiday season sales for brick-and-mortar stores would reach USD 878 billion – a 4.4 per cent increase from previous years. Despite physical stores comprising 87.7 per cent of holiday sales, the figure has gradually declined, and online sales were set to reach USD 124 billion. 43 per cent of e-commerce was carried out via smartphone or tablet.
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According to eMarketer research, 2018 holiday season sales for brick-and-mortar stores would reach USD 878 billion Click To Tweet
Alibaba recorded its largest Singles Day sales this year, with sales of over USD 30.8 billion. While not an exact match, Alibaba’s Singles Day is similar to Amazon’s Prime Day in many ways. Both “holidays” were created or built up for pretty much the sole purpose of offering deals and pushing sales. However, Singles Day is far larger than Prime Day. While Amazon does not release Prime Day sales figures, total online sales are estimated to have topped USD 4.2 billion over the company’s 36-hour Prime Day event in July 2018. Singles Day sales, on the other hand, were five times as much.Alibaba recorded its largest Singles Day sales this year, with sales of over USD 30.8 billion Click To Tweet
The 2018 holiday season sales of USD 1 trillion represents roughly 18.2% of 2019’s total expected retail sales, which according to eMarketer is expected to reach USD 5.529 trillion with a growth rate of 3.3%. During the same period, ecommerce sales are expected to grow 15.1% to USD 605.3 billion.
Holiday shopping across the globe
Boosts in retail over the holiday period are not limited to the US. Spain-based Inditex group, which owns retail giant Zara, witnessed a 35 per cent increase in sales over Black Friday weekend in 2017 – with the shopping holiday steadily gaining popularity. Black Friday is also popular in Brazil, where electronics sales witness significant spikes during the holiday. During the same period, Mexico celebrates “El Buen Fin” which is similar in nature to Black Friday. Black Friday was first introduced in 2010 and has since grown to become the largest shopping day in the UK. Boxing Day follows as the next largest shopping day in the UK. Boxing Day shoppers traditionally opt for more brick-and-mortar shopping. In recent years, however, online sales are gaining popularity. In countries like India, that don’t typically observe Thanksgiving, shoppers are increasingly looking at Black Friday sales online. Diwali is an important shopping time in India and a projected USD billion in sales was estimated for the five day festival, still far behind figures in the West.
Impact of the global holiday shopping season on GCC countries
As consumers across the region become more cost-conscious and less brand-loyal, purchasing behaviours are changing, with online shopping taking centre-stage. Consumer confidence in the GCC and the impact of VAT are said to have had an impact in Middle Eastern holiday sales, with 55 per cent of consumers actively looking for savings. Research by Black-Friday Global, which surveyed 12,000 people from 55 countries, found that 45 percent of Saudis will participate in Black Friday this year, spending on average 899 riyals, with the most popular items reported as being clothes, electronics and shoes.
According to online retail experts in the Gulf region, Black Friday allows an opportunity to boost sales and build relationships with new customers. They find that the interest in such events is huge. In 2017, Awok sold iPhones at a 75 per cent discount during Black Friday sales. The company used third party distribution and warehouse space to keep up with demand during the busy time.
Amazon-owned Souq.com launched its own shopping event termed “White Friday” which ran for 5 days in 2018, offering discounts up to 70 per cent. At the same time, Noon.com launched “Yellow Friday”. In 2017, Souq’s White Friday promotion more than doubled its sales compared to 2016, at its peak selling 18 items per second. “This year’s White Friday sale will be the biggest ever,” said Ronaldo Mouchawar, CEO of Souq. The company claims to have quadrupled the number of deals from 500,000 in 2017 to 2,000,000 in 2018. The Middle East’s largest e-commerce player, Souq, was acquired by Amazon for USD 580 million in 2017. Research firm BMI forecasts the UAE e-commerce market will grow by 27.5 per cent year-on-year in 2018, reaching USD 12.3 billion. Online sales are projected to rise further to USD 23.3 billion by 2021. Experts are pointing out that the key factors behind this growth were price, selection and convenience. Although the GCC does not celebrate Thanksgiving and other Western holidays, retailers recognizing the impact of holiday-related sales has led to higher sales during these periods. With an increasing number of retailers and e-tailers getting in on the action, holiday season sales in the region can anticipate further growth going forward.