As October started, brands in China started to gear up for Singles Day, Nov. 11, promotions. As in the past, Singles Day is the biggest retail event in the world, as many brands can earn over half of their annual sales in November alone because of this shopping festival.
Last year’s Singles Day saw Alibaba’s platforms, Taobao and Tmall, and JD break records for gross merchandise value, topping US$139 billion combined.
The Singles Day shopping event will start with a presale on Oct. 24, followed by the first round of formal events starting on Oct. 31 and the second round on Nov. 10. This annual sales festival is viewed as an opportunity for international brands to boost their 2022 revenues by selling in China.
We break down five things that US and global brands should know about Singles Day.
Brands don’t stand alone, as marketplaces provide supportive measures
To navigate market risks and uncertainties, Chinese online e-commerce platforms like Alibaba’s Tmall, JD.com, WeChat Smart Retail and Douyin (China’s original version of TikTok) provide support aimed to drive billions of views to support their merchants during the shopping bonanza.
E-commerce players will create pages that aggregate merchants’ promotions to drive traffic and sales.
The rules and mechanisms set up for consumers and merchants this year are more appealing than in previous years. Apart from the mainstream e-commerce giants, the growing new force Douyin is accelerating its e-commerce capitalization.
During the period, Douyin will offer discounts on platform service fees for merchants, brands and livestreamers.
Douyin plans to roll out multiple billion views of traffic support for merchants, and its rival Kuaishou announced that it would invest twice as much as it previously did to boost traffic.
Overall, with new policies and players in place, the shopping festival is expected to play a vital role in jumpstarting growth for businesses and platforms alike.
Demand spikes dramatically on Singles Day
Singles Day is significantly larger than Amazon Prime Day or Black Friday in the US. Some customers have been putting off e-commerce purchases for the last two months solely to save money so they can spend it on Singles Day purchases. That pent-up demand is discharged all at once on the day of the big sale.
Many platforms and brand websites have crashed or sold out of goods during the first vital hour of Singles Day. As a result, brands must remember to stock adequate inventory ahead of time and ensure that their supply chain processes are in order.
Still, good news arose in September – market demand remains resilient and consumer spending rebounds. According to the latest data released by the China Federation of Logistics and Purchasing (CFLP), China’s national e-commerce logistics index jumped by 3.9% MoM, and nearly reached the 108.9-point mark set in February.
Among them, the total business volume of e-commerce logistics YoY growth rate recovered to more than 20%, with the eastern region seeing the most significant rebound.
Customers prefer to shop and compare across multiple platforms
With the maturity of various e-commerce ecosystems, customers’ daily online shopping behavior and amount of screen time hours have become increasingly scattered. Diversified consumption scenarios mean consumers are no longer limited to only a few specific platforms.
When customer traffic to a brand becomes scattered, brands cannot rely on a single sales channel or social media platform to achieve their marketing and sales purposes.
Brands are allocating their marketing efforts to adopt emerging social media channels while building a presence on mainstream e-commerce marketplaces like Tmall Global and JD. They are embracing omnichannel strategies to increase the brand user base and amplify brand impressions through a variety of marketing tactics like short videos, content seeding and collaboration with influencers.
Livestreaming still remains a popular
Livestream shopping is an indispensable channel for Chinese customers’ online consumption. Especially for Generation Z’ers and millennials, social content like livestreaming and short videos are more intriguing to consume.
On Sept. 20, one of China’s top livestream influencers, “Lipstick King” Austin Li finally returned to his livestream show on Alibaba’s Taobao platform. That livestream session attracted 63 million viewers without any advance previews, bringing the industry and customers’ attention to himself and Taobao Live again after his three-month absence.
Following Taobao, all other e-commerce players have unveiled a suite of initiatives to empower merchants on their platforms to participate and draw in potential customers. The suite often includes supportive mechanisms like platform traffic incentives, discovery page exclusive recommendation rewards, and livestream traffic subsidies.
Short-form videos will play an even bigger role
JD.com announced a significant overhaul in March, with the introduction of short videos as the primary format for product information on the JD.com app, progressively taking the place of text and photographs. In addition to JD.com, online platforms Tmall and Pinduoduo have also increased the exposure of short-video content on their homepages since 2021.
Notably, thanks to the platform’s wildly popular short-form video content, Douyin is rapidly eroding market share from mainstream e-commerce giants, Alibaba’s Taobao Tmall and JD.com.
Short-form video is gradually becoming a trend, gaining more and more weight on major e-commerce platforms in terms of exposure opportunities to drive product discovery and sales conversions.
Franklin Chu is managing director U.S. for Azoya International, a provider of turnkey cross-border e-commerce solutions to assist retailers looking to expand into China through a cost-effective and lower risk method. To date, over 35 retailers in 11 countries are partnering with Azoya to expand into China.
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