Background:
In November 2009, 27 brands joined the first TMall Singles’ Day celebration, thinking it was just a promotion to boost sales in between two major shopping seasons – China’s National Day and Christmas. Everyone was stunned when Danish men’s apparel brand Jack Jones broke its sales record and achieved 5 million RMB sales ($719k USD) in one day. Singles’ Day is now the largest shopping event in the world, reaching 168 billion RMB ($24bn USD) in sales last year. Nevertheless, the decade-old shopping mania and e-commerce in China is at a turning point – with growth of both slowing in the last three years.
Details and Implications:
Alibaba is famous for its radical innovations and is not afraid to use the biggest shopping day of the year to test scalability of new technologies and strategies. Examples over the years include ‘entertain-ify’ shopping, rural Taobao, personalised recommendations at scale and custom service chatbots. Double 11 has given key insights to Alibaba and the entire e-commerce industry. So, what’s new this year?
From hunting bargains to chasing experiences
In a recent survey about Double 11, 20% of the people swore they wouldn’t make a single purchase this year. Among the barriers, more than 60% are service or experience related reasons, including complicated promotion mechanisms, long delivery times and bad customer service. “I’m not willing to get a bargain by sacrificing my shopping experience,” said one respondent. Alibaba has not only introduced new technologies like VR and chatbots to make the experience better but also focused on small print details in every step of the purchase journey, including partnering with key opinion leaders for ‘promotion digest’ guides and AI-powered logistic networks to minimise delivery time to as short as 30 minutes.
From shopping the world to selling to the world
In 2016, Alibaba introduced a VR headset to allow Chinese customers to sit at home and look for goods from US department store Macy’s. It was considered a stunt by many to market its young cross-border business, which focused on introducing high quality overseas products to China’s booming middle class. This is still a key pillar for Alibaba, with its newest effort being the high-profile partnership with online luxury retailer Net-A-Porter. However, this year Alibaba has upped its game by bringing the event hundreds of millions of overseas users, making 11.11 a truly global event. Lazada, the South East Asian e-commerce company, will host its first 11.11 Shopping Festival across six countries: Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam. It will offer more engaged consumer experiences and the biggest discounts of the year from LazMall and Lazada marketplace.
From e-commerce to ‘new retail’
‘New retail’ has been Alibaba’s key strategy in recent years, which means integrating online and offline to boost performance and experience. Alibaba has brought its famous “thousand people thousand face”, big-data based personalisation algorithm to offline retailers, enabling retailers to hyper localise their logistics, promotion and stock. Virtual maps of hot malls are integrated into the TMall app and consumers can tap into any brand store and start a conversation with a shop assistant in that specific store instantly if they want to get more information about product offering, sizing and promotion details.
Summary:
Considering how much China’s e-commerce scene has changed (from 170 million users in 2009 to 660 million Monthly Active Users today), Alibaba’s achievement is truly remarkable. We are seeing Alibaba’s continuous investment and strategies in all the above areas and each year we expect more invention and innovation. With a platform as powerful as Alibaba, advertisers need to work harder to maintain a balance between performance and a direct relationship with consumers. By next week we should know the numbers for Double 11 and whether the slump has been reversed. Whatever the numbers, we’re bound to see innovation in abundance.
Further Reading:
