In a country where marriage helps gain social status and is a symbol of success, how do you turn a day supposedly focused on celebrating single people into an exponential business opportunity? You’ll find your answer by looking into the Alibaba conglomerate, expert in this sleight of hand since 2009.
This year, once again, the respective e-commerce platforms of the Chinese group – Tmall, Taobao, AliExpress, Lazada among others – have broken all records: more than U. S $ 38.4 million of sales were recorded on Alipay, the online payment app of Alibaba Group (which also happens to be the most used in China with over 100 million daily transactions and over 520 million active users) for the single day of November 11, 2019 – the famous “Double 11″ or “Singles’ day”. Smartphones, cosmetics, clothing, luxury goods, cars and even laundry detergent were available for purchase to satisfy all those looking for a good deal.
An equivalent sales event in the West, is the infamous American “Black Friday”, which takes place after Thanksgiving and opens the season of end of year sales. However, the proportions of the Double 11 festival can only be described as unparalleled compared to Black Friday. Raymond Zhong, a New York Times reporter, goes so far as to compare Black Friday to a “yard sale” vis-a-vis its Chinese equivalent, so there you have it.
The Roots of Double 11
To understand this craze, it is helpful to find out how Double 11 originated. This Chinese alternative to the Western Valentine’s Day takes place on November 11 of each year (versus February 14), so on 11/11. The four 1 of the date represent singleness. This tradition was started by Chinese university students back in 1993 and consisted in buying a gift for oneself to reward or console oneself according to one’s current relationship – or lack thereof- status. Since then, the commercialization of this tradition has proven to be one of the most profitable, far ahead of Chinese New Year and the Moon Festival.
Breaking through the noise with a data driven strategy
With over 200,000 participating brands, you can imagine the challenge in being seen, heard and converting your audience, especially for medium-sized international brands that don’t benefit from the resources of large groups such as L’Oréal or Mondelez.
Truth be told, the strategy of offering discounted prices is only a quick-fix and an expected bare minimum for Double 11, as it is already offered by all competitors, which results in limited sales revenues. With the festival only being held for 24 hours, once per year, brands selling on Tmall must rely on a long-term brand development strategy to boost their visibility and sell during the rest of the year on the platform.
Festivals such as Double 11 should therefore be seen as an ideal opportunity for brands to collect a wealth of customer data, then fed into a CRM system in order to segment and retarget audiences. Based on the data available in the CRM, specific marketing channels can then be used to reach consumers. As an example, using data insights to personalize content with WeChat marketing will effectively engage consumers at different stages of the customer lifecycle. Weibo or Little Red Book (Xiaohongshu) are some of other trending social media platforms that can build long-term brand equity and brand loyalty, which ultimately leads to sales.
This is the approach Italian high-end stationary brand, Moleskine, has adopted for the last few years: “Our KPI’s for Double 11 were not only sales revenue but also to offer a brand experience to reach and convert a new audience by creating a community and reaching second tier cities in China” explains Andres Mantovani, head of digital and e-commerce for Moleskine China (Source: Warc).
An in-depth knowledge of the marketing and technology tools used in the Chinese digital ecosystem is therefore essential if you are a brand seeking to benefit not only from this particular event, but also from China’s e-commerce platforms to increase your sales.
Alibaba is keeping innovation at the forefront of their strategy to maintain & grow market shares
Competitors in China such as JD and Pinduoduo have followed suit on Alibaba’s trailblazing Double 11 sales strategy and offer discounts and promotions of all kinds for this festival. In response to Double 11, JD also created the “618 Anniversary Sale“, a day of promotions and exclusive offers that take place annually on June 18. This has been a winning strategy as 618 is now the second largest e-commerce sales event in China. Pinduoduo whose principle is to offer lower prices for bulk purchases and whose target audience is third-tier cities, chose to focus its selling strategy on “live agricultural streaming” through which users could buy in real-time potatoes, tomatoes and other fruits and vegetables in a few clicks.
Constant innovation is Alibaba’s motto for adapting to the digital savvy and highly sophisticated Chinese audience attuned to the latest technological gadgets and trends. Hence, sales in “live streaming”, exclusive collections or new collections available for the occasion (such as the KKW cosmetics line from the Kardashian sisters) or the use of the latest available technologies of artificial intelligence to allow consumers to virtually try-on makeup, are just a few examples of how the Alibaba platform has targeted its audience for this latest 2019 sales edition.
The Alibaba group has also heavily relied on delivering key messages ahead of the big day, such as the emphasis on sustainable development through its logistics partner Cainiao. “For Double 11 this year, all our efforts will not only focus on our profitability but also on sustainable development,” said Jiang Fan, president of Taobao and Tmall. The installation of “recycling points” for delivery cartons and usage of gamification to reward the efforts of users being able to use “coins” to plant trees through the Ant Forest association affiliated to the Alibaba group are some of the measures the group’s official news agency Alizila has been promoting.
The veil of uncertainties has been lifted
By publishing its sales results in real time, Alibaba has strengthened its position as the uncontested global leader and disruptor in the realms of e-commerce and digital transformation. Despite the many doubts that hovered over this event, neither the absence of its charismatic founder Jack Ma, nor the trade war between China and the United States have managed to tarnish the success of Alibaba’s 2019 Double 11 and that speaks volumes.
If you enjoyed this article, read more about insights on digital transformation and topics related to digital transformation here.
Want your brand to become a player in the Chinese e-commerce market? Contact us for more information.