Against the background of competition and economic uncertainty, China’s leading e-commerce festivals will see more brand participants achieve deeper customer engagement through discounts in addition to increasing GMV.
1. The pre-sale for China’s 11:11 single-day shopping festival began last Monday (October 24). Unlike last year, when Tmall’s eye-catching green strategies and dynamic brand debuted in the metaverse, this year a quieter shopping festival appeared, an appropriate time to rethink the role of the highest post-festival of the year.
Brand Loyalty
Bain & Company has partnered with Tmall to conduct research and report on luxury products and pet care products in recent years. In its latest study, China Singles Day 2022: Loyalty Is a Better Target Than RMB 1 Trillion, the research firm asks about the shopping festival, its omnichannel shopping experience, and the differentiation of value propositions of retailers.
We have loyalty programs for over 40 brands, with over ten million members, and 600 brands with over one million members. “Despite changes in consumer behavior, the impact of COVID and global macroeconomic conditions, Singles Day remains a top priority for Chinese retailers,” said Kelly Liu, Head of Greater China Retail at Bain and Company
“Singles Day and the 618 Festival in 2021, it still accounted for 12% of all online retail sales in China. However, engagement is now far behind customer loyalty
Spending perspective and the role of discounts
Another reason for brands to focus on loyalty comes from the retail calendar growing, with more consumers jumping between platforms Bain’s survey found that 69% of consumers plan to shop on three or more platforms, up from 56% in 2021, and only 24% said they plan to shop more on a single day this year, which is much worse than in 2021. 2021. Pursuing fickle, price-conscious buyers is hard work.
“Chinese retailers have an opportunity to meet the challenges of Single Day and the external environment,” said James Yang, retail partner at Bain and Company. “As it moves from discount to loyalty, merchants can single day ingle Day nd engage
consumers year-round.”
But not all retail strategists agree with Bain’s spending outlook or the idea of moving away from discounts. In fact, AlixPartners’ 2022 Annual Survey, which follows the 11/11 Shopping Festival, found that nearly 60% of consumers aim to increase their spending this year, with younger consumers most likely to increase their spending . Discounts continue to attract consumers, and Double 11 shopping is known for its bargains compared to other festival sales.
Pete Lin, North Asia CEO of We Are Social, continues to believe that discounts and deals are the best way to drive increase e-commerce sales, not least because of the current difficult economic situation. “Frugality is a hot topic in mainstream Chinese culture right now,” he says, “so I expect value brands to do well.”
“Every year, consumers comment on the level of discounts offered during the Double.11 event,” says R3 China CEO Sabrina Li. “Things always seem to cost less than usual.
But these low prices come with increasingly complicated requirements or assumptions. Finding ways to offer additional discounts can be difficult and has been a headache for some brands. For example, last year, L’Oréal caused controversy because there were price differences between its live pre-sale products compared to the cheaper official price of Tmall sales when the actual festival started, He agrees that it could be more profitable for brands to focus on engaging their consumers rather than chasing sales at festivals. He says that brand marketers have realized the importance of first-party data.
Since not all brands have direct control over retail prices in the store could put more emphasis on their own channels (online and offline), which may cause a decrease. November shopping festivals (desire).
With that in mind, Lin also advises brands to “cool down” in November to seek longer-term benefits instead. “I would advise brands to moderate their enthusiasm for this Double 11 as China is still recovering from the recession in the first half of 2022. If I were a brand manager, I would save the budget for the next purchase. period which is Chinese New Year 2023”.
The Role of Live Broadcasting
During the so-called “cold 618”, Alibaba did not announce the GMV of the June Shopping Festival, and much of this was due to the suspension of live streaming during the COVID restrictions, including live streaming from major KOLs. Austin, Li.
Chinese media reported that in the Double 11 pre-sale after the first night of Austin Li’s return to streaming, the one-night GMV (gross merchandise value) reached RMB 21.5 billion, which is higher than the pre-sale in live broadcasting He and Viya last year. But Li’s company disputed those numbers, citing inaccurate data and a lack of evidence, so the jury may still be out on the impact of its streaming.
For example, Lin of We Are Social is skeptical. With the economy at its worst in years, I don’t think the streaming icons (which are few and far between now) will be able to convince consumers to continue making impulse purchases. 11.11 season, he tells us “That’s another way of saying that Austin Li’s first-day success was probably more hype than substance.” At R3, Sabrina Li prefers to focus on how streaming, including Austin Li’s “All Girls Deal” online chat, is just one part of a larger marketing strategy. While he notes that the show connects with fans through live merchandising and content marketing, he says can also reflect how brands are shifting their focus back to educating consumers and building trust.
“Streaming may have the advantage of converting sales quickly, but it will never be the primary medium for the entire population,” adds Li.
At the same time, competition between streaming platforms is intensifying. This year, instead of Douyin’s sessions, leading KOL Luo Yonghao attended Taobao’s live business event. But Douyin’s real-time trading aggressively reached others. In fact, 58 percent of respondents planning to live plan to use Douyin, up from 38 percent last year, according to an annual survey by AlixPartners.
In the light of traffic monetization, even popular video sharing site Bilibili among China’s Z generation joined e-commerce shopping and launched its streaming function before Double 11, although they still have a long way to go. closed Tmall continues to promote greener sales.
Tmall/Taobao remains the most important player in green shopping.
Through the membership program, Alibaba cooperates with brands to once again create deeper online communication and promote a greener shopping experience.
This year, Tmall will label low-carbon products in more shopping categories, such as clothing, food, and cosmetics, as requested by the Tmall Green Alliance last year.
To improve communication with consumers, brands such as P&G, Haier, ThinkPad, and Yili produce durable shopping bags with Tmall and send them as gifts to consumers. According to Tmall, one crossover bag is made from six of the recycled PET bottles purchased.
Chui Xue, Director of Industry Development and Director of Taobao and Tmall Operations Center, noted in the Alibaba 11.11 live blog that despite the challenges of the past year, sales partners are constantly looking for new ways to engage the shopping public. “This year has been extraordinary and business partners have walked with us to find certainty in the midst of uncertainty.” R3 Li advises how to create long-term relationships with consumers: “brands must adapt their marketing and communication strategies to each level of the consumer pyramid .
For price-conscious buyers, marketers must invest in brand education. Discounts, promotions, and real-time shopping are all short-term solutions that can speed up consumer decision-making. But this can result in brands losing out on future trades due to diluted profits. He argues that “to achieve more sustainable revenues, brands need to think about long-term engagement beyond e-commerce and explore their omnichannel strategies.”
Source:Campaign
