“10 years ago, I saw it because I believed in it.”
“10 years later, I can see everything with my vision”
–2018 Global Tmall Carnival
This year, Alibaba’s Double 11 final transaction volume was locked at RMB 213.5 billion, 21% growth vs 2017, with payment through fingerprint and facial recognition reaching 60.2%. With 1 billion orders delivered and multiple countries outside China participating, this continues to be the world’s biggest event in terms of scale, participation and innovation.
2018 marks the 10th anniversary of Double 11 – a shopping festival that is not only significantly important to China’s retail, but also to the whole economy. It has gone beyond being just a pure “ecommerce” festival, to becoming a marketing phenomenon that is redefining the rules.
In 2016, Jack Ma defined five new strategies i.e. new retail, new finance, new manufacturing, new technology and new data. Every year, we see Double 11 pushing boundaries on retail, marketing, and distribution and manufacturing innovation. This further cements China’s leading position globally in digital and commerce innovation.
This year, once again, Double 11 has created new rules for marketing. The deeper integration across the entire ecosystem, with data powering new experiences, brings in more people and, with it, greater scale.
Jing Jie, CEO of Tmall said – “Tmall is not only an online trading platform that connects brands to consumers. It is a driving force for global brands and retailers to win across the consumer journey.”
To identify key opportunities for marketers to tap in the future, Publicis Media has distilled the learnings from Double 11 into 3 key areas.
- It is not just about data quantity but also about data connectivity. This requires marketers to rethink how data can drive decision making.
- Seamless movement of consumers between online and offline retail channels requires brands to rethink roles of channels across the consumer journey.
- Localization of consumption opportunities across different regions and tiers require custom go-to-market strategies.
It is not just about data quantity but also about data connectivity.
This year, Alibaba have called out all players within their ecosystem to lean into the battlefield, thereby expanding traffic, increasing more dimensions, and being more relevant across life moments.
More traffic: Over 500 million users participated, with more diverse spread across tiers and more seamless connectivity across the entire ecosystem. No matter what the entry point, people had an integrated and friction-free experience.
More channels: 200,000 New Retail Smart Living Tmall stores were connected to brand online stores, 600 new retail stores and supermarkets in 165 cities (100 Hema Stores, 62 Yintai Department stores and 41 Easy home stores) also participated in Double 11’s product discounts, thereby opening up more avenues to shop.
More dimensions: “Ele me” “and “Koubei” linked 1 million restaurants, fruit stores, flower shops, local entertainment businesses, 3 million delivery riders participated in Double 11 this year. Moreover, Taopiaopiao has also connected and cooperated with 5000 cinemas, Fliggy Travel linked with more than 200 destinations worldwide and 10,000 travel products. Youku have aggregated 26 TV dramas and variety shows in 6 categories.
More access: The integration of various types of data enabled marketers to have a more holistic view of audiences. With access to assets such as Data Bank, marketers were able to be more data-driven in decision making.
Data driven marketing is gaining more sophistication in China. With greater access to data, it is possible to know what consumers want, how to engage them, and how to drive conversion. There is a clear need for brands to drive mastery in this area.
- Gain an in-depth understanding of consumers by using data in a smarter way.
- Understand and spot problems with greater agility, powered by data.
- Accumulate data across the consumer journey by tapping into different entry points.
Rethink roles of online and offline channels across the consumer journey
In 2017, “Tmall Xiafan” (pilot event on New Retail) was launched. Alibaba selected popular, top selling brands from Tmall Supermarket to sell in Darunfa (local supermarket chain). Uniqlo tapped into this trend and launched a feature where consumers can purchase online and pick up offline.
Source: Tmall Double Eleven (Official)
In 2018, we saw the “Tmall Xiafan” effect increase dramatically. Gone are the days when online and offline channels fought for the same share of consumer wallets. Now brands are mastering the opportunity to integrate online and offline channels.
Suning is known for its offline store presence. For Double 11, 10000 Suning stores have launched that consumers are able to collect and redeem shopping coupons (subsidies) online and offline. Suning-Egou played a key role to bring in offline traffic and drive to their online store.
There was a new benchmark set in Ali’s New Retail in the realm of home furniture. “Easy Home” was a big player in Double 11 with 41 stores across 27 cities, and more than 4000 brands participating. Within 9 hours and 42 minutes of the big day, sales volume of its stores exceeded RMB 1 billion.
Source: Suning Quanmin Carnival Media Press (Official)
Implications for Brands
- Breaking past stereotypes, online and offline channels are not in conflict, but can further enhance the overall experience.
- New Retail is not “new” anymore. Brands must design for seamless movement of consumers from online to offline.
Localization of consumption opportunities across different regions and tiers require custom go-to-market strategies.
With acceleration in China’s urbanization, 1st tier cities tend to be saturated. The growth momentum has shifted to the lower tier cities, including towns and villages. Usually, these are places that large brands can’t reach easily due to limitations in physical distribution. However, with rising internet access in these markets, the consumption potential is waiting to be unleashed. According to Alibaba Group’s 2018 Annual Report, Tmall annual active users increased +25 million from April to June 2018, and 80% of them are from third and fourth-tier cities and countryside areas. Data from Fliggy shows that 54% of users who have purchased travel products on the platform are from tier 3 and 4 cities. As per Xiaohongshu, over 80% are from second and third-tier cities; more than 70% of the users are post-90s and more than 50% of users are post-95s.
Although lower tier markets provide potential, the consumption habits and power are completely different from the first-tier cities. Cun Taobao (Taobao Rural) created more than 400 food products on Tao Yum this year, including rice, noodles, fruits, vegetables, meat and eggs, covering more than 20 provinces across the country and reaching more than 30,000 villages across the country.
Implications for Brands
- Customize products for emerging markets through data. In the past, foreign brands were imported to China just as they are. It is becoming imperative to adapt based on what is relevant across regions and tiers.
- Physical availability is not a barrier. Brands must leverage data to create meaningful holistic experiences, but also extend to insights around operations, logistics and delivery.
- There is an untapped opportunity for local brands to go more national and even global, powered by data and technology.
Finally, we should appreciate every consumer, from young students, newcomers to the elders. Every person has his or her own preferences.
It is their rapid acceptance and enthusiastic participation in the digital economy, which is constantly driving innovation and further transformation. With deeper data, the ability to personalize the experience will drive deeper relevance across demographics, tiers, markets, and lifestyles.
So thank you to every consumer who shopped this Double 11.
With your participation, you have raised the bar higher for 2019.
Author: Sapna Nemani, Chief Intelligence Officer, Publicis Media Greater China