What will $238 BN get you these days? The Ostrich Report

Welcome to another episode of the Ostrich Report Marketplace Podcast you didn't know you needed. Now you're wondering why you're listening. I'm Vinny O Brien. I'm your host today alongside my good friend in Cape Town, Hendrik Globescher. Hendrik, how the hell are you?

Dude, it's another beautiful day. Um, you can most probably hear a bit of a gust behind me coming from the window. It's a bit windier down south. Um, but it's been a, it's been a pretty big week in e-commerce. I doubt if many people actually know what we're talking about today.

Before we even get into that, tell me, does the wind affect the grapes and make the wine better in South Africa?

I I am going to most probably talking out of school here. I think the case is a resounding yes, in the sense that the wind shares the heat in places like Franschhoek and others. Thus, um, think about it, the heat is required to essentially create more sugars inside the grape. So yes, I tend to believe the answer to your question is yes.

For a guy who said you're talking out of school, you seem to know a bit about it. I, I went to Parle for a while in 2020. Yeah, it was nice in Franschhoek, and the breakfast wines were my particular favorite. It's, it's not often you get to say that because it sounds like a really odd thing to say that you're having a glass of wine at breakfast, but hey, when in Cape Town, that's what you do, right?

Uh, yes. Um, and the fact is, is that South Africa is a very cheap holiday for folks from Europe and the US because of the the poor nature of the rand versus the dollar. It's still, as of recording today, it's 17 rand for a dollar. So you can have a really good quality of life, um, coming down south here.

Yeah, it was 18 to 1 on the euro when I was there, which is kind of incredible. And right now it's running, running at something similar, I think 20 to 1, that's where it's at. But look, enough talk about wine. As you said, it's been a big week in e-commerce, uh, just this week. Some of the marketplace news that was coming out of there that kind of caught my eye. One of the big ones, Zalando sales are up 26.5% in Q3, showing really, really good momentum, up to about $2.6 billion, um, which was reported in Retail Gazette this week. And the other big news, I suppose, from a trading perspective, and it's relevant to what we're going to get into, is that Amazon, uh, have announced that they are going to be running a 12-day Black Friday, Cyber Monday, Cyber Tuesday, Cyber Wednesday, Cyber Thursday, Cyber Friday, Black Thursday campaign, and then you repeat that for the next week. So what the hell is Black Friday, Cyber Monday anymore, I ask you, Hendrik?

So I think we have to just take a moment here and just realize that these shopping events are moving earlier in the calendar every year. Nothing new here. No, no, that's not like a— I'm not telling any new, new stories. I do think though what's happening globally is that I believe that the West is slowly beginning to more adopt what happens in China. So in China this week we had, uh, the 11/11 global, uh, shopping festival. And the thing is, is that yes, you can only buy on the 11th, but these things start like in mid-October. So what everybody wants is they want more inventory, more opportunity to offer customers the opportunity to, you know, get deals. But what nobody's talking about is, is that this just extends the pain that sellers are gonna have for this period, extended period of time. So it's again that push and pull of retail and e-commerce that we always talk about.

So there's this interesting school of thought. It's kind of a modern phenomenon, knowing about Singles Day, 11/11, as you talk, but it was born in the '90s where students were celebrating the idea that they were single. And that was the idea. It was a group of people. The 1111 mantra represented those individuals, and it has grown exponentially since then. So I remember at its peak when I tuned into it, you had some of the major platforms were bidding on global pop stars to come and open up events. So I remember Justin Bieber, Britney Spears, you name them, they were there. All of the world's most famous actors were on runways where shoppable live runway events were available almost 12 years ago, which, which when you think about it, it's kind of incredible. So picture this for anyone who's not familiar. You're at an event, Justin Timberlake is on stage or Jessica Biel or whoever you want. They model a piece of clothing, you can buy it using a QR code or some equivalent from the runway as they're walking by you with a guarantee of 15-minute delivery to your home. It's kind of staggering. Other things that they did as this evolved, again, to give the idea of scale size, and you said we're adopting some of these Chinese methods. One or two of the things that they did for expats, so Chinese people living abroad, was to keep them in the loop. They had a John Lewis event in, I think it was around 2018, 2019, where they had a game where you had to follow a fish, an augmented reality fish that existed on your phone, and where the fish appeared, that guided you into a store to go and find a deal. So you had all these people walking around with holding up their phones, and but they were actually following deals. And this is a fully integrated TV event that's integrated into every piece of your life so that there's game shows going on, there's fireworks. This, this is not um, this is, it is not a small deal. I think the average Chinese person— I remember doing my last study on it probably 3 years ago— was spending approximately, um, I think it was just under 20% of their annual salary, annual salary, over this event. And it's not just one day, as you said, it's now expanded. It's, it's quite enormous. And, and that's kind of what we're here to talk about today, is to just shed some light on it again, because it is an economy by itself. Okay. So the number that we're going to start with, Hendrik, and if I've forgotten anything by way of background for people, please jump in and tell me some of your stories about it. But the number that they're reporting right now from Singles Day this year is $238 billion in joint GMV across all the major platforms, which is a staggering number. What do you make of it first and what do you think of it as an event?

So I've been lucky enough to go to China and experience 11:11 in, in person, and I don't think I have the English to do it justice in the sense that they had, um, Miranda Kerr, I think is her name, um, the, the CEO of Snap's partner, um, on stage. They had Nicole Kidman on stage. They had music performers from Southeast Asia. I remember seeing, I think it was Lidl or one of the European retailers were having a live music event amidst this. Um, that was, it was in the stadium in Beijing, and it is utterly mind-blowing in the sense that you feel like you're in a sports event, but there's just people, you know,, you know, just talking and having their phones out. So that's the one thing. The second thing that I'll always remember is that you have these— this show, the 11:11, like, event on TV, and it's available on local TV that's visible to everybody that tunes in. You have people sitting on their phones and in groups, and it's entertainment. It's, it's utterly mind-blowing. And I think The, the $238 billion in GMV, that communicates the scale to me in the sense that we have to remember that when this event started, and I would say in the early 20— 2020s, before the pandemic, this was the event where Alibaba, JD.com, and more recently Pinduoduo They trumpeted all these numbers, these, you know, these massive growth, you know, brands doing, you know, 100 million RMB in sales and all these things. And then in typical China fashion, the Chinese Communist Party, the CCP, came down like a house of bricks on these platforms, and they said that they, they don't want any further splurging and They, they, they want this to be seen as more as a rational event. So let's put it to you in context. $238 billion in GMV is 75% of the total budget of the state of California.

Wow. It's— and for, for those listening or watching, myself and Hendrik, we're trying to put this in context for ourselves. So we went away and we had a look at What's the equivalent value? And what struck me when I first thought about it was the Irish healthcare system. So for 5.5, 6 million people, uh, we, we run a healthcare system on about $15 billion a year. This is $238 billion. Hendrik has told us it's 75% of the Californian budget to run the city. It is double the New York City budget to run the, run it from the mayor's perspective on an annual basis. So it costs about $115 billion a year to run the city of New York. That's your services. That's your street sweeping, that's your, uh, picking up garbage. It's, it's all those things we take for granted that keep our cities, uh, ticking over. But it's an incredible number. What are some of the other ones that stand out for you on the list, Hendrik?

I, I just think for me it's, it's the— just think about all the, the packages that needs to be shipped in the sense that you have this massive storm that happens over a period of time, and then it becomes like this major rush to get the deliver— the goods delivered. You know, that for me is the thing that I'll never ever forget.

Yeah.

And, and I think from an economic standpoint— okay, so here's the, um, here's the, here's the one that caught my attention. Um, this is only 1 and a 3/4 smaller than Apple's total revenue from full year 2025. Just, just put that into numbers. So Apple's annual revenues for full year 2025 was $416 billion. That's a global business.

Yeah, and again, like, 49% of the entire Canadian federal budget. These numbers are staggering. We're, um, we're talking over very short periods of time, even though the event has extended, it's closer to being a month long. And I, I've, I've a question because I want to break some of this down, and we, we will go through some more of these numbers because they're just Uh, they're, they're economies by themselves. But, but my question to you, Henrik, that I haven't kind of talked to you about before, it raises this point that I know people like Philip Jackson and, and Brian Lang talk about, which is this intersection of commerce and culture. And this is probably the most visceral place that those two things connect.

Yeah.

And it seems to be where the most success comes from a consumption perspective. And if you look at it from that economic perspective, it's almost utopian from that perspective. But does it give us some sort of guiding light as to where commerce could go? Because we, we're— we, we are years and years, years away from being anywhere close to that. And I think we as consumers behave differently. Um, but is it that utopian place?

I always say, Vinny, that, uh, China is a parallel universe in the sense that there will be no replication of this anywhere in the world. Yeah, the culture meets commerce, that trans— that's that, like, that middle point for me is best explained when you think about it like this. The 11/11 Global Shopping Festival does not move the stock of Alibaba, none whatsoever. It doesn't move the stock price of JD.com, nor does it move the stock price of Pinduoduo. The reason why I mention this is that we have become so indoctrinated in the West with Amazon's PR, the, you know, the press releases where they tell you a lot without telling you anything. This in China is very different in the sense that, um, this year, for example, the hottest toy that everybody wanted to buy for their family or friends was AI-enabled toys and tablets and things where there's AI part of the situation. This is also this year for me the first real event that we will see the impact of AI in commerce, because Alibaba made it very clear before the event that this year there will be significant more AI used by them to make the event more efficient. Improved search, improved customer service for the, for the sellers. So we now have a North Star to look at what happens during a Black Friday/Q4 at scale that doesn't happen anywhere outside the world.

So again, contextually, just kind of taking a few points that you've mentioned there, Apple, one of the brands that we're all very familiar with, they've emerged as one of the standout performers among, let's call them, Western brands. Uh, iPhone 17 sales on Tmall exceeded the previous year's entire Singles' Day total within the first 2 hours of the 2025 event, which is quite incredible. The suggestion here is also that Nike, uh, maintained its position as one of the strongest Western brands, doing approximately $1 billion, uh, through exclusive member discounts. There's a few things in there. There's the membership program, which I think is really, really interesting. And there's the fact that the AI category, as you mentioned it, were quite a bit off, but AI glasses increased threefold year on year. AI-related products were up over 200% from the sales numbers that were there last year. So it's quite a staggering event in the way that it introduces products. And I would say that's something that's missing from Western sales events right now. I'm thinking of Black Friday predominantly. We don't have any exciting products anymore leading the line. And I think Amazon really benefited previously when they had their own versions of Alexa coming out, or new home-led devices that had smart technologies in them. They just don't have that kind of throughput of product anymore. Are we over-commoditized in the Western culture, or are we just more reticent to take on AI-related products? Or is it inevitable, looking 3, 4 years out, that you and I'd be sitting here talking about the growth of AI-enabled toys?

Uh, so you have asked me 5 questions.

I'm gonna try an Irish thing. You're gonna have to bear with me.

Come on, it's okay, it's okay. Okay, so let's, let's start with the first thing.

And I've already got my next question, which is—

okay, so first things first, I think we have to make mention that all of these Chinese marketplaces have membership programs that provide significant benefits to their customers. I think the world does not understand properly that Alibaba has 88 VIP. So 88 is a lucky number in Chinese, um, num— uh, characters. So that's a very big deal. So when you tell me Apple and Nike have done these huge numbers I rationalize that by this is the only event in the year in which Ali— uh, which Apple, sorry, has the blessing to these platforms to sell their products at a discount. It's not going to happen. I remember being in, in, in China when Pinduoduo was still, you know, still a very small problem for the entire sector and they used a distributor to get access to Apple's products without Apple's consent, and Apple just said, uh, no, you're not going to do that. Secondly— or thirdly, sorry— I think it's important to note that all of these Chinese platforms have significantly invested through incentives and coupons and discounts to drive consumption from consumers. And I think what this leads to is that we are seeing a much more consumer— Chinese consumer, sorry— that has matured and is morphing away from being deal-focused to actually looking for value. I know that sounds amazing to say out loud, but I, I genuinely believe that, and that is coming from the top down. The other thing that I will also say is that They view shopping as entertainment. And I think the one thing that I always come back to is it takes a brand 15— one-five, humans and people listening— 15 interactions to get a consumer in China to a conversion. We do not have that in the West. We have a few less, in my opinion. So what I'm trying to say is that these consumers are very, very sophisticated. And to your point, um, Vinny, I will add something to this. I think the problem with Western shopping holidays— Prime Day, Big Deals Day, Black Friday, Cyber Monday— is that the quality of the deals have become less. Because the fact is that the sellers haven't been able to get proper, you know, like notification about when this happens. You know, every year I see the same thing. There is this big online, you know, debate about when is Prime Day or when is Big Deals Day. Or I just think the fact that these less good deals is leading people to not wait for it, whereas in China To your earlier point about people spending 20% of the annual salary on this event, this is the event in which you save your money for the entire year because you know that you're gonna get access to deals only for 24 hours. And the other thing that I also need to make mention here is, is that all of the platforms— JD.com, Alibaba, and Pinduoduo— They have significantly made the Black— uh, sorry, the 11/11 shopping festival promotions simpler. In the past, it was the case of you needed to, as a consumer, you needed to build a shopping cart. You couldn't check out, you could check out. There's a bit— there was a billion hoops for consumers to jump through. That's no longer the case. I just think that what's happening is that Q4 in the West for me is moving significantly forward, and I believe we are getting to a place where in the next 5 years it's very likely— I believe that the entire month of November is going to be a promotional month. I genuinely believe that. And the reason why that is the case is that all the platforms in the West are starting to adopt 11/11 as a shopping holiday. So I, I'll just say this to you, in South Africa I had Adidas, I had Adidas that offered, um, promotions for Singles Day. Uh, Puma had deals for 11/11. A fairly, uh, luxury leather business, Jekyll and Hyde, They had, um, 11/11 deals. So, so what I'm saying is, is that this shopping holiday is slowly moving out of China into the rest of the world. It doesn't have the same momentum outside of China, but I think one of the things that you said right at the start of this conversation is really important, and that is that the amount of Chinese customers living outside of China is steadily growing, and those customers are buying from these platforms and getting goods shipped to them via cross-border services. So the point for me is that this event is, is moving out of China, and it's, it's, it's going to force every local competitor in on every continent, whether it's Jumia and Takealot in Africa whether it's Mercado Libre and Magazine Luiza in Latin America, Flipkart and all the guy competitors in India. It's gonna force these platforms to have to have deals for it, otherwise they're not going to have people coming to them. It's as simple as that.

Yeah, it begs the question as to where Black Friday will go because it feels like an exhausted event for both consumers and for retailers alike. And particularly in this year where inventory planning has probably been the most difficult it has been for quite some time with tariffs and everything else going on all around the world. And I just read news this morning as well that the EU is looking to remove the de minimis threshold as well. Shout out to Joe for sharing that with us earlier on. So it means that there's going to be further shifting in terms of the way that European consumers are going to get access to products as well. And we have had this model in place for a long time in France. They do have designated periods for discounting and sales events, and it seems to work. I think you look at the health of their industry from a retail perspective and it is far better. But I don't think we've quite found the identity of what Black Friday is. So that was why I asked that cultural question, because I ultimately think we grapple with this idea of trying to build our brand or build a community and everything that goes with it. We've got to have these, these aspects embedded more in our cultural life. And I, I've never really thought about it with any great depth until recently enough, but that is the only way that we move away from this constant pure consumption idea to embedding technology and retail throughout our lives. I think if we cannot achieve that, it really puts a ceiling on where commerce and technology can move the needle for us because we either reject that there's going to be more of this in our lives or we fully accept that it's going to be there and we want it to be more embedded and more friction-free. And I think that's the way that I'm going to be observing it looking into the future.

I agree with you. And I think the one thing that we also have to add is that the other variable in this conversation that's not being spoken about is that you have, um, Chinese platforms like Temu and Shein, AliExpress, all moving into, you know, focusing on outside of China. So suddenly you have a local version of this being available to consumers. So look, here's the thing that I think that I'm— that I've learned over the years is that Chinese platforms, they leverage every opportunity to have a promotion to ensure that they can— their consumers stay loyal. They— I, I think they figured it out. They figured out the, the spread of it through the year. So it's, it's the day that the platform was launched, you know. They have a Super Brand Day a couple of times a year where brands are given the opportunity to exclusively promote to their customers. But it's only specific brands. But this thing has moved from being, you know, one platform, and we are seeing this in the US and the rest of the West as well, where, you know, an event that was specifically created by Amazon Prime Day has now become a battleground between Walmart, Target, Amazon, and everybody else, because everybody understands that you have to be where your consumer is, and you have to ensure that this is why you are able to market. Otherwise, they're gonna not be— they're not gonna stay on your platforms. As simple as that.

Two points just there, and I don't want to labor them too much, but I, I think product ubiquity has been a huge challenge for us. The availability of the same product everywhere at the same price means the only thing you can differentiate on is price or service. And, you know, most people don't engage in cross-border, they, they do that through marketplaces. So then it's, you know, it, it can be very difficult where there's alternatives to your product, um, to not just be in a price war. The, the other, um, the other aspect of that then is, uh, those alternatives that are out there as well. Like, there are just so many of them that we need to find a better way to, to, um to rethink how we want to do product selling globally, which is not an easy thing to do. And again, I'm going to go back towards the end of our conversation now to kind of give people some context around the numbers that are here. I mentioned the Irish Health Service at the top. It would be enough that the revenue that was generated between October 9th and November 11th, which was the final day or the penultimate day and Singles Day, $238 billion, that would run the Irish Health Service for just under 8 years, the NASA space program for just under 9.5 years, the New York City operational side, the federal or the, the state funding, uh, 2.1 years. So if I have to combine all of that, Ireland's HSE, the health service, plus NASA, plus running New York, we would get 1.5 years out of that type of revenue. Which is a staggering sum by any stretch. The behavioral side of it, I think you've covered off incredibly well. What we're seeing in China is a much more loyal customer, someone who is value-oriented and maybe not as dependent on Western brands as they once were. But Hendrik, I think we should watch this going into the future and maybe give people some updates on some of these platforms in the months ahead.

Yeah, look, I, I, I, I agree. I think the Chinese marketplaces have adopted AI in different manners than what's— what I'm— what we're seeing in the, in the, uh, the West. I, I think the one thing that I just wanted to add is, is that Alibaba works with the large brand partners through an innovation center called the Tmall Innovation Center, TMIC. And what they do is they work with these brands year-round to help them develop limited edition products that are only available on 11/11. So it could be a different flavor drink, it could be a different flavored hair gel, it could be different flavored cookies, it could be— so to your point about ubiquity, that's, that is where we still in the West need to— we need to get to that place where these platforms actually work together with the brands to actually help them, um, have to have unique supply. Because I just think with the, the commoditization of retail and e-commerce in the West, what is the only thing that's going to happen? It's a race to the bottom, and which doesn't help anybody involved.

Yeah, I think so. The Innovation Center is interesting, and maybe we can do a session on this where you can break down for us the difference, and maybe we'll talk to some of our partners. Because I think even the idea that big brands are willing to negotiate with their Eastern counterparts on delivering a unique experience, they don't have that same openness when it comes to Western or European platforms. I wonder why that is, and maybe we'll get some brand partners on talk about it. And it really puts into context why the Black Friday discussion is going to be so boring by comparison. Yeah, yeah, it's going to go out with a bit of a damp squib, if I'm being really honest. And like I said, Black Friday, Cyber Monday, Black Tuesday, Black Wednesday, Black Thursday, Cyber Friday, Black Wednesday, Black Saturday, like it goes on and on and on and on. And it's actually gaining a bad reputation now, which I think tells us all it's time to pause, reflect, and maybe have a think about what we want to do in 2026. The one thing I would say for anyone that's listening on the retail side of it, if you're in it and you're getting exhausted by it, it has taught you that if you delight your customers, come up with something unique, care about them for even one weekend of the year, you can encourage them to come and do more with you. That's not just about selling something on discount. I said do more with you. If you did that 4 times a year instead of once and put so much effort into delivering it, I can guarantee you with the experiences I have had, you're going to retain more customers, you're going to get them to tell your story, and it's going to be a much better way for bringing new people through the door.

I agree.

Hendrik, we have exhausted single-save, but look, it's given us loads to talk about, loads to think about. And for anyone listening, we're going to put up some of those numbers in the show notes. And as ever, we're going to break this down next week, and we will be talking also about the pre-loved market. That's where we're doing a lot of research right now. Uh, I'm wearing my pre-loved cardigan, um, and I look like someone who's pre-loved as well. So Hendrik, you enjoy the rugby this weekend, have a good time enjoying it. And you know what, I was thinking to myself we should bring back the e-com around the world random beer on a Friday.

I agree. And listeners, if you are interested, get in touch with us. We, we, we do enjoy having a cold beverage. Some of us drink adult beverages and others of us will just have a cold fruit juice or whatever. But Vinny, I, I, I'm looking forward to our conversation about the pre-loved sector. I'm hoping we're going to talk about Vinted, because Vinted is on my radar. But I also think that we, we should be talking about China a lot more, and I think doing a deep dive on the relationship between brands, and especially global brands, with Chinese platforms, I think it's worth a conversation.

Yeah, I think so.

On that note, um, hey, you are not— you're not pre-loved. You all loved. Um, and have a great, great rest of the day, and I look forward to our next episode, man.

Yeah, for sure. And before you go, this is going to be my opener for you on the, the pre-loved eBay sponsor Love Island with pre-loved clothing. So picture this, you get told you're one of the contestants, you go to some beautiful location in a remote island in the South Pacific, and then you get there to put on your secondhand bikini. Hendrik, till the next time, we'll talk soon.