• After a lacklustre 2022, Tmall and Taobao built Chinese New Year-esque festivity around Double 11 this year through CNY Gala-style teasers.
• High-tech AI, AR and metaverse promotion was combined with hyper-localised out-of-home (OOH) advertisement.
• Double 11 Gala returns for the first time since 2021, this time with more integration with livestream channels and sales promotion.

Double 11, the annual shopping extravaganza centred around the titular November 11th, returned this year after last year’s rather muted affair. This year’s festival sees Tmall and Taobao bring back the Double 11 Night Gala, which was skipped entirely last year, in a bid to revive enthusiasm for the shopping festival.

Double 11: the new New Year?

Leading up to the presale of Double 11 this year, Tmall released a series of 15-second commercials reminiscent of the state-sponsored Chinese New Year’s Gala, or how many remember the Gala to be. To be precise, the video, more similar to content than a commercial, was in the style of classic moments of early 1990s galas. From the set design to the studio audience, everything in the videos is modelled after the classic spring festival variety show.

The singer Cai Guoqing, a true CNY Gala staple, recited poetry, the actress/comedian Cai Ming recreated her famous robot sketch with a younger actress, while newcomer actor Wang Yaoqing handed out cash to the audience. The recreated Gala walked the line between nostalgia and parody, as there was a surreal sense of comedy with all acts. The series was followed by a fourth clip, this time for Taobao instead of Tmall. It featured actor/comedian Tang Jianjun paying homage to his mentor Zhao Benshan’s classic rural fashion show sketch.

The very New Year-y topic, #给您拜个早双11# (“Wish you an early happy Double 11”), garnered a whopping 2.43 billion views on Weibo, the Twitter-like Chinese microblogging platform.

The other Cyber November

Similar to previous years, Tmall worked with 60 brands for their collaborative posters. However, what is special this year is that Tmall teamed up with 18 brands for AI-generated posters. For the first time, Tmall released a video of a parade with 50 AI-generated brand-themed floats to further build excitement before the main sales events. AIGC is one of the themes this year and a Taobao vs Tmall AI-generated image competition was launched for users to prompt their own images for the team they support, the team getting the most likes would win.

Metaverse was also an important thread this year. Tmall launched a virtual online space called “Tmall Happy Land”. Collaborating with 9 different IPs, the virtual land contains 9 concept spaces with IP themes for users to explore and treasure hunt. Another effort in the metaverse is Taobao and Tmall Group’s Alimama launched its own “曼塔沃斯” (transliteration of “metaverse”) and hosted a virtual concert of Elva Hsiao. 24 “Brand Planets”, or themed brand spaces, were included in the metaverse, where users could explore, get exclusive outfits for their avatars, take pictures of these outfits, or even participate in virtual events.

In real life

Alibaba’s build-up towards Double 11 was not limited to online channels, especially for Taobao. A giant inflatable Tao Xiaobao, Taobao’s mascot, embarked on an 18-day 18-city tour all around China. Smaller costumed Tao Xiaobao and Tmall’s cat mascot Mao Tiantian accompanying it on this hyper-localised tour. A shipping box recycling campaign aimed at students was started on campuses around the country.

Meanwhile, in small towns and rural areas, huge billboards in the style of certificates of commendation from schools or workplaces thanked people, especially sellers, for their work. Nostalgic wall-painted slogans popped up around the country, promoting Taobao’s 15% off. In total, Taobao painted 550 walls in 12 cities across China.

Grand finale

The Double 11 Night Gala started in 2015 and has continued as an annual event, apart from last year. With a roster of international A-listers like Taylor Swift, Benedict Cumberbatch, David and Victoria Beckham, as well as domestic stars such as TFBOYS, Joker Xue and Jay Chou, the gala has been known to attract a huge viewership. One of the highlights of previous galas was the announcement of the total sales number of that year’s Double 11 festival, which was missing along with the gala last year.

This Double 11, the gala returns with a slightly altered title, changing from “狂欢夜“, “Night of Revelry” to “惊喜夜”, “Night of Surprises”. Also changed was the partner, from Zhejiang Television on TV and Youku online, to Hunan Television and its sister web broadcaster Mango TV. The gala also forwent international celebrities and focused on celebrities from China, such as Jackson Yee of TFBOYS, TNT and Hua Chenyu. As expected, no total GMV was announced this year, but growth was recorded.

Technology played a big part in the gala this year. Not only was Yee’s headlining performance aided by AI-generated augmented reality (AR) rose petals, but the gala also incorporated livestream channels. The channels were streaming simultaneously with the gala, with segments in the gala connected with the streaming channels. Prizes and offers were given interactively between the “big screen” and “small screens”. There were also walls of screens in the studio projecting the livestreams during the gala.

There were more online and OOH campaigns during the period, such as the highly memeable Gold Peach Awards. But the main focus was to bring festivity back to the shopping festival. At a time when even Chinese New Year is often criticised for lacking a festive atmosphere, Taobao and Tmall are seeking to bring that feeling forward, shifting it onto the festival once known as “Singles’ Day”.

The post Happy Double 11: How Alibaba built festivity around this Double 11 appeared first on Dao Insights.

1. The young still buy at Double 11 and most spent the same or more than last year

88.1% of Soul users said they made purchases during Double 11. Over 70% had the same budget (36.8%) or more (35.6%), compared to last year. However, most people kept rational consumption in mind and stuck to the essentials. 78.9% of Soul respondents set limits to their spending and only 15.9% went over their budgets

2. The era of brand-hosted livestream channels has arrived

The survey from Soul confirms that the trend of brand-hosted livestream channels is strong among younger consumers. 30.68% of their users bought through these channels, while only 12.2% made purchases “based on recommendations from leading livestream influencers”.

2023 has been hailed as the “first year of brand-hosted livestream”. Over 60% of livestream channels selling over 100 million RMB (13.85 million USD) are brand-hosted. The ratio seems more pronounced among Soul App users, a cohort made up of 80% Gen Z.

3. Self-care and experiential purchases are on the rise

Almost 50% of young people bought experiential products or services such as travel, health checks and healthcare. Nearly 60% of the post-95 generation users bought travel products or services during Double 11, and 23.8% post-00s purchased more travel products or services than in 2022. This would also point to the post-pandemic trend of self-satisfaction among Chinese consumers.

From 1,757 respondents, Soul has gained a representative picture of its predominantly post-95 and post-00 user base. As well as re-affirming observations that self-care is on the rise as a purchase motivation, this report also reveals how far-reaching these trends are among Chinese Gen Z.

The post Does Gen Z still shop during Double 11? 3 key takeaways from Soul App’s user survey appeared first on Dao Insights.

This year, major platforms all banked on low prices to attract the now rational consumers. Taobao and Tmall displayed tags on items that had “the lowest prices online” while offering compensation if customers found lower prices elsewhere. Other offers included direct 15% off on items without the need to reach a certain order amount. JD.com had offers like 50 RMB (6.86 USD) off every 299 RMB (41.02 USD) spent across the platform, 20 RMB (2.74 USD) coupons and did away with presale to start the sale with items in stock.

However, both companies posted year-on-year growth in sales, as well as new records in several indicators. Taobao and Tmall Group reported growth in GMV, order number and participating merchants. As of midnight November 11th, 402 brands have over 100 million RMB (13.72 million USD) in GMV and over 38,000 brands saw more than 100% in sales growth. Similarly, JD.com reported record-high transaction volume, order volume and number of users.

Although the major individual platforms did not disclose precise growth figures, there are some estimates on cumulative GMV from the whole shopping festival. Syntun, a data provider, estimates that across all major platforms, the cumulative GMV sales grew 2.08% to 1.14 trillion RMB (156.40 billion USD) this year, while last year saw 2.9% growth.

Some, such as the state-owned tabloid Global Times, hail the platforms’ growth as a sign of the full recovery of consumption. At the same time, others think that e-commerce companies continuing to not disclose GMV figures is a sign that consumer sentiment is still a long way off recovering to pre-pandemic levels.

The post Alibaba and JD.com report growth on Double 11 but stop short of disclosing total sales appeared first on Dao Insights.

Hopes for a “revenge consumption” spree were dashed early in the year as “rational consumption” and “price-to-performance ratio” settled in as the post-pandemic keywords. One article that recently hit Weibo’s top searches went so far as to say younger consumers are “spending in reverse”.

This elusive new term “reverse consumption” has much the same meaning as rational consumption – cost-effectiveness is king. But its emergence does not so much signal the arrival of a new trend as serve as an announcement; whatever happened this year is not just a phase.

This is all happening as China’s biggest shopping event of the year gets underway. As consumers undergo major shifts in their thinking and motivations, do frenzied shopping festivals like Double 11 still have a place in today’s China?

Golden age

To understand why these changes are such a big deal, we need to go back to the concept of “consumption upgrade”, which has been heralded as a backbone of China’s development. Consumption upgrade is a process characterized by goods and services improving significantly, buying power going up, and consumer demand skyrocketing. Crucially, “consumption upgrade” also meant consumers by and large were willing to pay a premium for quality.

The recent slump in demand has prompted fears of a consumption downgrade. State media refutes this notion in favour of stronger 正能量 (“positive energy”) messaging about the upward trajectory of China’s modernisation. Similarly, the author of the original Weibo article about “reverse consumption” made explicit that the trend does not equal a large-scale downgrade.

Back to the future

Terms like rational consumption and reverse consumption describe consumers avoiding impulsive spending and considering purchases carefully.

But while “rational” implies a temporarily cautious approach to spending in uncertain times, “reverse” points to a broader questioning of the assumption that high prices always mean better quality.

“It may appear that consumers are tightening their belts and spending less, yet what this shift truly signifies is a more value-driven approach,” says Yaling Jiang, a cultural analyst and founder of Following the Yuan, a Chinese consumer-centric newsletter.

So “spending in reverse” is not to say consumers are no longer willing to pay a premium for quality, but simply that they are far more skeptical about what is considered quality – and who gets to define it.

This mindset is a natural consequence of consumption upgrade, the most recent phase of which saw technological upgrades transform smartphones and social media into the ultimate commerce hub. “Consumers are unwilling to compromise on quality, as the preceding era of ‘upgrade’ has cultivated a more discerning customer base,” adds Jiang.

The recent PR crisis of C-beauty success story Florasis drove this message home. Even the most persuasive marketing tactic of all – guochao or “China chic” – holds little clout if it’s not backed up by quality products with well-justified prices. China’s consumers are not convinced that splashing out on the grounds of a brand’s reputation or exclusivity is a good pay-off. Brand name is not enough.

Consumers are demanding clear messaging on the value added by the product and how it stacks up with what else is on offer. Or, as China tech keynote speaker and strategy consultant John Lin puts it: “It is less about who you buy from, but what you buy and how it will make your life better.” 

How to stay relevant

Can Double 11, with its tendency to encourage impulsive spending, still appeal to consumers in light of this?  This year’s mood so far is mixed.

“On one hand, it’s the first Double 11 after China lifts restrictions, so there’s an anticipation for more extravagant consumer behaviour, particularly in the realms of fashion and beauty. On the other hand, there has been fatigue toward e-commerce festivals and discounts, and the effects of stagnant economic growth are showing,” Jiang explains.

But there is wiggle room for retailers and brands willing to adapt. “Profit is the last thing [e-commerce giants] care about – gaining or defending market share is the name of the game this year,” says Lin. Alibaba, the inventor of the Double 11 festival, made an early announcement that this year’s event would no longer focus on Gross Merchandise Value (GMV), instead making the objective “lowest price on the network”. KOLs like Li Jiaqi, known for his “buy, buy, buy” slogan, are also expected to change their tune for the long term.

In terms of catering to a value-driven approach, Lin bets on sustainability being a key way brands can keep the big price tag. Brands can also consider bundling products together and marketing the specific combination as a lifestyle upgrade, advises Amber Zhang via China business substack Baiguan.

Whether consumers are considered “rational” or “in reverse”, the years ahead may be the start of the next biggest marketing challenge for brands and retailers as the framing of shopping festivals will be everything. They may also have to change their own expectations. If retailers can stop trying to “win” at shopping festivals and think of it instead as a chance to better understand how their products compare with others’ offerings, gather data, and increase visibility, Double 11 may just be able to stay relevant – and more than that, fun.

The post Does reverse consumption signal the end for Double 11? appeared first on Dao Insights.

Public data shows that for many apparel brands it was the cornerstone of their online revenue often accounting for more than 15% of the annual total. Insiders say the true percentage is often much, much higher. The promotional nature of the event combined with high marketing costs (buying traffic as well as creating compelling content to convert that traffic) has meant that these events in and of themselves were rarely profitable. The pressure on e-commerce teams to beat last year’s performance to keep both corporate HQs and the Tmall algorithm on the side was intense.

Next along came livestreaming which compounded the issues. All-powerful live-streamers demanded extremely aggressive discounts, exclusive products and deals for their followers. They also received hefty commissions. Fortunes and mega-stars were made but, again, at what cost to business profitability and brand image and equity? What was all this doing to business bottom-line performance and resultantly, long-run viability? What about consumer behaviour? Why would they buy between promotions when they know they just need to wait a few weeks before the next “big push”? And the brands themselves? Being endlessly on discount is never good for a brand. E-commerce in China had become an exercise in discounting and brand equity erosion.

But the online landscape has been shifting of late. In our view, it is a result of two major factors: regulation and brand “fatigue” at the operating model that was so reliant on promotional activities.

First, regulation. There was a time when investment in alternative platforms was hard to justify. Tmall’s stranglehold on traffic made them marginal endeavours at best and the backlash from Tmall was also problematic. Frequently, the juice was simply not worth the squeeze and brands were better off focusing on optimising their Tmall businesses.

Then the central government stepped in with a raft of measures. Almost overnight brands were free to set up on JD.com etc without the concomitant downsides on Tmall we had all gotten used to and reluctantly acquiesced to. That then led to more platforms springing into life. The Little Red Book (or Xiaohongshu), Douyin, and Pinduoduo all suddenly became platforms brands could and (should) work with.

Secondly, business and brand “fatigue”. The old adage “revenue is vanity but profit is sanity” had been suspended for many businesses as they chased year-on-year revenue-beating strategies whilst desperately trying to recover some profitability for the e-commerce businesses between promotional events. For most, there was little profit associated with Tmall.

And, as mentioned above, livestreaming only exacerbated that issue. The revenue-chasing was akin to a heroin addiction – toxic and extremely hard to get away from. In fact, it was a prisoner’s dilemma for brands: all your competitors delivered beautiful growth numbers so you had to too, right? Who would “blink” first and take the heat associated with “underperforming”.

Brands were looking for a way to go “cold turkey” so when the regulation kicked in opening up these new platforms and routes to consumers the energy and desire were absolutely there to go after them. This has hastened and exacerbated the slowdown on Tmall.

For every RMB decline on Tmall it is now easily more than made up for on other platforms where discounting is not so endemic. There are platforms for that such as VIP.com and Pinduoduo but there are others where a brand can showcase its offering without that compromise.

Of course, Tmall is not over. Not even close to being over. It is still the major force in China’s e-commerce and it is hard to envisage an e-commerce business in China without it. However, it is not the “be-all and end-all” that it was. It is also much more pleasant to work with these days. More of a partner than a bully.

In our view, there has never been a better time to grow your e-commerce business in China. A brand can choose where and how to show up more now than ever before.

Additional research by Gary Liu

The post What does another muted online shopping festival reveal about China’s e-commerce evolution? appeared first on Dao Insights.

However, recent statistics revealed that over 1,000 overseas brands on Tmall Global did succeed in achieving year-on-year GMV growth of more than 100%.

Data from Chinese e-commerce giant JD.com showed that on the first day of presales for the major online sales event, global brands on the platform received orders worth 178% more compared to 2021.

In fact, this year’s Double 11 witnessed a growing demand for certain product categories such as mobile phones, sports & outdoors, pet products, collectible toys, and jewellery.

Scouring to find the best discount deals

One notable difference, however, was that Chinese buyers seemed to be fatigued by multiple shopping events. With several new channels and platforms to shop from (such as short-video platforms that focus on e-commerce), it’s becoming more difficult to capture the attention of shoppers.

There has also been a change in consumer behaviour as people are shopping throughout the year instead of saving for large, one-time purchases during big annual shopping extravaganzas.

As a result, consumers are keen on getting the best discount deals and prices. It has been one of the key drivers for purchases at this year’s Double 11. Having stocked up throughout the year, they are only interested in buying more if they get significantly better discount deals.

As per AdChina.io’s tool for conducting keyword research, some of the significant searches around the Double 11 festival were to do with sale prices, and they wanted to know if this year’s was cheaper. There was a whopping 57K monthly searches on Baidu for ‘Is Double 11 really cheaper than usual’.

To capitalise on customers’ interest in discount deals, businesses like Alibaba offered an extended window for customers to claim a “lowest-price guarantee,” while offering free shipping for returns.

Growing interest in domestic products

Another difference with this year’s Singles’ Day was that Chinese consumers clutched their wallets tighter than usual and sought out relatively economical home brands over pricier premium labels.

Since 31 October 2022, more than 2,000 items generated sales exceeding 10 million RMB ($1.4 million) each on the Tmall marketplace. More than half of these items were from Chinese brands as per the data from Alibaba Group Holding Ltd.

As per Douyin’s 2022 Double 11 report, domestic goods accounted for more than 90% of the top 100 best-selling products. Among the bestsellers were Chinese home appliance products from Haier, Midea, and sportswear from Anta. However, international names such as Apple, L’Oréal, and Nike also made the bestsellers list.

Mobiles phones and home appliances were a big hit

In terms of product categories, the most interest was in mobile phones, specifically iPhones. There were over 500 monthly searches for ‘IPhone 13 Double 11’, around 200 monthly searches for ‘Will the price of Double 11 Apple 13 be reduced’, and 4,000 monthly searches for ‘How much discount can I get when buying mobile phones on Double 11’.

The search trends were in line with overall sales numbers for mobile phones. The turnover of Apple, Xiaomi, Huawei and Honor mobile phones exceeded 100 million RMB in just one second of the official launch of JD.com’s annual shopping spree.

The trends also revealed a high interest in improving the quality of life at home due to recent lockdowns with Chinese consumers growing increasingly willing to pay for appliances with specific functions. For instance, the sales of televisions with gaming functions and high-end floor washers peaked during the Double 11 festival.

The shift toward metaverse

China has always been the world’s window to the latest digital innovations and this year’s Double 11 saw the rise of virtual idols and virtual shopping malls.

‘Double 11 Live Broadcasts’ have always been popular (with over 3,000 monthly searches on Baidu). Additionally, more than 300 million people tuned into Taobao Live on 24 October to watch virtual and real-life hosts showcase products.

However, there was a significant rise in virtual influencers and a decline in the presence of some notable real influencers. With over 13,866 monthly searches for ‘virtual idols’, as per AdChina.io, more and more brands have adopted them to reach out to younger audiences.

While previously, Double 11 sales broadcasts were led by Alibaba’s key influencers Li Jiaqi and Viya, known respectively as China’s King and Queen of livestreaming sales, this year, their presence was absent.

Instead, Alibaba’s hyper-realistic digital influencers, Ayayi (by Chinese electronics giant Haier) and Noah (American fashion house Tommy Hilfiger), helped buyers shop live.

Alibaba also launched a virtual shopping mall for Double 11 where shoppers could browse over 700 products through the eyes of customisable avatars. They could try on accessories virtually and have a 3D view of furniture. These virtual shopping features provide brands with the opportunity for a significant digital upgrade.

What’s in store for Double 11 2023?

Overall, despite speculations around this year’s Double 11 not being a huge success for Alibaba, it’s clear that the shopping event is still very relevant to a big segment of Chinese shoppers.

These consumers still actively look forward to Double 11 discount deals, and both foreign and domestic brands plan their marketing strategies around targeting them during the shopping spree, and there are new digital innovations happening in this space to enhance their shopping experience.

Based on the current trends, Double 11 2023 could look very different from 2022 both in terms of sales and the way users shop online. However, it will continue to be a massive opportunity for businesses to reach their most valuable customers and test their digital marketing strategy in the Chinese market.

The post What did the Chinese population search for on Singles’ Day 2022? appeared first on Dao Insights.

The announcement follows the opening of Puma’s flagship store on the viral short video app, ahead of the festivities that accompanies China’s largest annual e-commerce bonanza Double 11, with the collaborative series to make a debut in the brand’s Douyin livestream on 5 November.

The new collection is comprised of a series of products including exercise underwear, seamless high-stretch sports leggings, and active outerwear, catering to the style needs for scenarios ranging from the gym to the office. The simple design crafted with light fabric dedicated to a woman’s body is peppered with a diverse range of light colourways that draw inspiration from nature, such as coral pink, tidewater green, and apricot yellow.

This is a shrewd move from Puma by leveraging the popularity of this fitness personality to boost the brand’s performance in China. The country saw a fitness craving emerge due to COVID outbreaks and Pamela soon gained steam in the territory whilst timely breaking into the market. And her “no-equipment” workout solutions have become a sought-after remedy amongst China’s female home workout enthusiasts. 

The 26-year-old has now become a household name, especially amongst the Gen Z crowd. She amassed an accumulated following of more than 5.4 million in just three months following her entry into China in 2020 and continues to make a splash on China’s major social media platforms including Weibo (China’s biggest microblogging site) where she has over 1.8 million followers, Bilibili (China’s answer to YouTube) and Xiaohongshu (China’s largest lifestyle-sharing platform) where she is followed by over 9 million on each platform, and more than 10 million fans on Keep (China’s biggest mobile fitness app).

The fitness model also saw her followers surpass 10 million on Douyin to 13 million since landing on the platform in April. Therefore, by introducing the upcoming debut of the new series on Douyin, Puma will be able to create synergy between Pamela’s influence and the country’s livestream fever to further pull up its online sales.

The livestream session on 5 November is now open for pre-booking on Douyin. It is understood that the new collection will also soon arrive at Puma’s flagship store on Tmall as well as its official website during the ongoing Double 11 online shopping carnival.

The post Puma x Pamela collab to debut on Douyin ahead of Double 11 appeared first on Dao Insights.

Immersive digital experiences are accessible without the need for external equipment such as VR/AR headsets or goggles. This applies not only to online shopping and virtual try-ons but also to virtual exhibitions, camping, and watching TV dramas and is set to become the “new normal” in the upgraded Tmall mobile app.

360-degree vision has also been made available to provide consumers with product details for watches and jewellery, camping tents, and home appliances. Users can preview items in real-life scenarios in the digital environment, a feature afforded by the platform’s technological advancements.

The multidimensional space can be accessed through Tmall’s homepage and users can virtually tour brands’ conceptual storefronts, visit designer-toy retailers and experience the fantasy of Love Between Fairy and Devil, an ancient Chinese romance fantasy series that has gained steam amongst China’s Gen Z drama fans since airing in August. Therefore, leveraging the enthusiasm for the hit drama to boost the platform’s appeal to its target consumers.

To keep consumers entertained throughout their online visit, the digital space incorporates outdoor scenarios so users can experience activities such as glamping in “natural landscapes” ranging from forests to snow mountains and islands. Equipment is available in various styles provided by different brands which can either be installed or removed. Users can also switch between different scenarios in just one click, tapping into the nation’s continued campaign fever while enabling a more interactive shopping experience.

Adding to the digital endeavour is the “Treasure Pavilion”, a space displaying brands’ new drops and where visitors can play around with smart products backed by cutting-edge technologies. Users can trial drive Xpeng’s flying car, which just made its public debut flying in Dubai in October, or play with the robot dog developed by Chinese robotics start-up Unitree. In addition, a digital collectibles zone has been set up, presenting a total of 50 virtual artworks including cartoon figures through to cyberpunk headsets and cultural relics, maximising the synergy between various subcultures and the digital collectible hype.

The post 3D shopping to become “new normal” as Tmall launches virtual blocks amid Double 11 festivities appeared first on Dao Insights.

Taking the lead in Double 11 so far is JD.com, which has stepped up its game in terms of increasing traffic by more than 20%. On September 7, JD.com announced its “four new measures” for this year’s Double 11, including “recruiting new merchants, establishing new mechanisms, launching new services, and opening new growth”.

Following JD.com, Taobao and Tmall released 12 measures to support sellers’ Double 11 operations, from reducing pressure on merchants to prepare for the shopping festival to offering product services and promotions.

Further heating up the competition is Douyin and Kuaishou, who are two growing new forces in the industry. In 2021, the number of Douyin e-commerce merchants grew 3.5 times that of 2020. Meanwhile, Kuaishou e-commerce had more than 200 brands with a monthly gross merchandise value of over 6 billion RMB ($837 million). Coincidentally, both Douyin and Kuaishou will launch their own in-app malls ahead of Double 11, challenging e-commerce giants such as Taobao and Tmall.

Over the course of its fourteen years of operation, the meaning of Double 11 for consumers, platforms, and merchants alike has shifted greatly, losing a bit of its appeal along the way. For consumers, it has changed to the pursuit of low prices and quality service. However, new players could help promote healthy competition beneficial to the e-commerce industry in the long term.

All in all, with new policies and players in place, the shopping festival is expected to play a key role in kick-starting the business growth of platforms and merchants. 

The post Chinese platforms gear up for Double 11 shopping festival appeared first on Dao Insights.

• The tech giants seem to have already reached their maximum GMV increase as this year’s sales appear to have gone stagnant, with the big two, Tmall and JD,  reaching sales of 540.3 billion RMB ($84.6 billion) and 349.1 billion RMB ($54.6 billion) respectively.
• With the strengthened supervision and the continued promulgation of the Common Prosperity policy, platforms hosting Double 11 this year are becoming greener and more responsible to build a much more trustworthy image.
• For the next 3 to 5 years, Double 11 will stay as an essential shopping festival in China. However, the festival will transform to focus on the discovery of new products, and strengthening brands and consumer connections. The platforms’ ability to give back to society and consumers have become increasingly important.

Every year, tech giants would examine their own business model during the Double 11 Shopping Festival. They seem to perform well on GMV, steadily increasing for the last 13 years. But the growth rate of Tmalls’ GMV 8.45% stayed in single digits for the first time in 2021 after four consecutive years of double-digit growth. This year, Alibaba’s 13-year-old child, its Double 11 Festival, has grown up to the next stage where the increase of key targets like discounts and GMV no longer holds priority, instead, focusing more on how the child can give back to society.

With the business environment changing, what did tech giants do to adjust to the change? Is this year the turning point for Double 11?

Platforms are taking up more social responsibilities

This year is certainly a turning point from a social responsibility perspective. All major platforms have unanimously decided to spend much of their focus on social responsibility, minor consumer groups, and making Double 11 more sustainable.

Taobao launched the “Elder Model” scheme and the “Double 11 Elders Venue” event specially developed for the elderly which attracted 1.1 million silver-haired users per day. Elderly people were considered as a low consumption group, but statistics show that the sales volume of online shopping for elderly users this year increased by 4.8 times year on year.

Elderly people are more likely to spend more and it is predicted that by the end of this year the scale of the silver-hair economic market will reach 5.9 trillion RMB ($925.3 billion).

This year, JD has been trying to use recycled packing materials to reduce environmental pressure. It is said that each package could save an average of 210 grams of packaging materials, 11 grams of disposable plastic, and 25 cm of tape. The large number of packaging boxes was always considered a huge waste, it was more pragmatic to recycle packaging materials on the road to increase sustainability. Green consumption might go from being a trend to being mainstream.

This year’s Double 11 has successfully adapted to the changing environment and opened up a new stage. Previous Double 11 festivals used to focus on just numbers, whereas this year’s Double 11 has heeded the national call of energy conservation and carbon neutrality goals.

It is no doubt that one of the reasons why platforms are taking on more social responsibilities is because of the tightening regulations. The continuing regulations for anti-monopoly on tech giants have made all players associated with Double 11 behave very cautiously. Previous rules for merchants to sell exclusively on their platform have been removed this year with brands and merchants now free to sell on any of the platforms. This is a huge move for brands as this can expand their sales channel and develop a multi-platform marketing strategy with reference to their brand feature and positioning.

Expanding marketing scenarios in the era of radical digitalisation

Other than the external environment change, what sounds the alarm for platforms is the ever-changing taste and preferences of consumers, which was also what made this year a turning point for Double 11.

As Gen Z comes to the forefront of society, the platform has to adapt to its considerable spending power. Having grown up with continuous digitalisation, Gen Z is tightly combined with the virtual world and even had a new business concept derived called the “metaverse economy“. The concept of metaverse has rapidly entered people’s vision this year and has been widely discussed, becoming a super hot topic for businesses.

This year’s Double 11 has turned to embrace and try out this concept.

This series of new marketing attempts coincides with the current young people’s pursuit of individuality and self-expression. Although the metaverse concept at this stage is more of imagination of the future, statistic shows that the scale of China’s virtual idol core industry was 3.46 billion RMB ($542.6 million) in 2020, an increase of 70.3% year on year, and is expected to reach 6.22 billion RMB ($975.5 million) in 2021.

The continuous innovative ability that Tmall has successfully shown also conveys its ambition of winning the young generation and increasing user retention by offering a new consumption experience endowed by technology.

With a strong logistics system and low turnover days, JD.com has achieved good results in offline sales this year. JD achieved a turnover of 160 million RMB ($25.1 million) and a passenger flow of 250,000 in the offline self-operated stores within the first four hours of its opening. Suning, through intensive publicity and direct discount strategies, increased the number of visits to the store by 122% year on year.

We can see that e-commerce giants are successfully taking full advantage of their offline stores to directly contact consumers, accelerating the pace of online and offline integration and expanding the significance of Double 11 through promotion, attracting new customers, and increasing interactions. This year, the Intime Department Store has launched a WeChat Mini Program and provided counter-free shipping services. From October 20 to November 10, the volume of express orders increased by 44% year on year.

Social sharing has become a new strategy

As Alibaba introduced a 20-day recommendation period prior to the Double 11 Shopping Festival this year, consumers now have a longer decision period, bringing social sharing features to the table.

The Recommendation Machine that Taobao and Tmall launched this year has helped consumers easily find the products they wanted by searching up certain keywords and then further filtering the content format through short videos, live streams, and user feedback.

JD has also upgraded its content platform “Guang” with the theme, “Discovering Treasure” and the slogan, “Everyone is a discoverer. Everyone is a product ambassador.”

Sharing on social media provides an opportunity for brands to test out whether their products are or will be popular among consumers, this is especially true for when they are about to launch new products. It also provides a better content consumption experience for consumers and helps further improve sales and user stickiness.

Trust crisis may emerge as consumers become more rational

After more than ten years of Double 11, consumers have become more rational. A survey of this year’s “Double 11” from Southern Metropolis Weekly shows that 50.72% of consumers reported they have encountered false quotations when it comes to products purchased. Complex promotional methods and better alternative shopping festivals like 618 and Double 12 have also reduced the attractiveness of Double 11 to consumers.

The duration of the Double 11 Shopping Festival was further stretched to 20 days this year and the sales volume increased significantly. But the data lacked horizontal and vertical comparability. The 7-day no-reason return and promotion policy allow customers enough time to recover rationally and return these products bought on impulse. Because of this, the GMV is unable to reflect the true sales of Double 11 to a certain extent. Some merchants said that the return rate of certain categories of goods on some platforms, such as clothing, could reach a maximum of 60% from Double 11 purchases.

As for now, the platforms seem to succeed in reconciling this contradiction and constantly trying to find a balance between user experience and platform revenue and gaming between consumers and brands.

What would Double 11 be like in the future

This year’s Double 11 has been unique in showing new expectations of the future development of tech giants. The trend for big sales and overconsumption has passed and Double 11 is turning into a new stage where platforms are beginning to work hard to serve businesses and improve quality.

Since Double 11 now lasts for nearly a month, it has become the most concentrated time of the year for consumers to get personalised recommendations for niche and exciting products. Both platforms and brands should pay attention to how to effectively leverage this festival especially with the ever-changing technology, regulations, and consumer behaviour, all of which are able to reshape the industry.

With e-commerce giants focusing on attracting more and serving existing merchants in the future, they should prioritise providing an ecosystem that is able to empower brands through innovative marketing methods first. The future of Double 11 will revolve around launching new products, discovering new products, and building up a brand image. The content ecosystem is more efficient as it creates the shortest consumer journey from being recommended to finishing the purchase.

Additional research by Joanna Wang

Read more:

The post Is this year’s Double 11 a turning point for Chinese tech giants? appeared first on Dao Insights.