Celebrated on November 11, Singles’ Day has always been an index of China’s economic success, but this year’s edition in particular has been by far one of the most important since its first creation in 2009. Despite the pandemic, Tmall declared a total GMV of almost 64 billion Euro split between a first round of promotions that kicked off on November 1 – 3 (less than a third of the total amount), and a much bigger one on November 11 (around 47,5 billion Euro). Great results also for JD.com, China’s e-commerce number two, for a total GMV of almost 35 billion Euro. Looking at the most performing product categories, we can see home appliances, smartphones, clothes and personal care, together with luggage and shoes; while among the 474 brands that registered more than 12,8 million Euro of revenue, almost 60% achieved higher results that the same period last year, according to Caixin
(in Chinese).
But how does 11.11 work for buyers and sellers?
Singles’ Day promotions function in a different way from other international shopping festivals, and each year something new is added to the formula: in 2020 for example, a period of 3 days was added at the beginning of the month to further stimulate the purchases. Putting aside these small yearly changes, Singles’ Day incentives to consumers can be broken down into 4 main boons that can stack:
- Deposit Fee: up to 2 weeks before the promotion dates, consumers have the possibility to anticipate a fixed deposit for each order placed. This deposit is deducted to the total during the days in which the promotions take place, and its purpose is twofold; from one hand it is used to reserve the item chosen for the purchase, while from the other it gives access to a discount, usually greater than the deposit fee anticipated by the consumer;
- Cross-shop discounts: fixed discounts that apply to the whole cart if the buyers reach a specific purchase target on different shops;
- Shop discounts: each shop gives a discount based on the total value of products purchased;
- Taobao Coupon: each purchase guarantees a coupon that consumers can spend in any shop participating to the promotions.
How does Singles’ Day look from the merchant’s perspective?
Let’s take Tmall Global for example. Participating to Singles’ Day is free and each shop can choose whether to participate or not. However, there are a few requirements that the platform asks to the merchants:
– agree to participate to all discount activities of the promotional period;
– cover extra logistics insurance fees for the consumers.
Merchants who decide to comply with these rules can candidate their shop to participate to the promotion, but it’s the platform that will choose which of the bidding shops can effectively take part to the online event. The final judgement will depend on a number of different factors related to the demand of certain products, but also on the lifespan of the shop, the renown of the brand and many more (39zn, in Chinese).
Chinese online shopping festivals have different dimensions of complexity, since all of them have specific pre-requisites and can be used by merchants to achieve different goals. However, navigating through each of them is not easy, not only because the sheer amount of materials to study, but also due to the efforts of the platforms to make merchants candidate to each of them. For these reasons is imperative for your team to have strong and extensive knowledge of these activities in order to build pricing accordingly before starting.
Visit our website and follow us on social media to stay up to date.
Contact us to find out the best DIGITAL MARKETING STRATEGY for your business: info@oborgroup.net
Great article