The biggest retail event of the year ended last week and set a new record. Alibaba Group’s 11.11 Global Shopping Festival closed out the event with US$84.54 billion in gross merchandise volume (GMV). This year was by far its largest edition to date, bringing together at least 900 million Chinese consumers and 290,000 brands.
JD.com reported a record-breaking Singles Day Grand Promotion on 12th November with a transaction volume totalling RMB 349.1 billion (US$ 54.5 billion) at midnight of 11th November, ending the 11-day promotion that started from 8pm on 31st October.
This 13th edition of the 11.11 shopping festival marked a new area as key players are looking beyond numbers. Success metrics are shifting: GMV is now a figure to be considered alongside sustainability and inclusivity targets as well as customer retention.
We talked to industry experts as they reflected on this year’s 11.11 shopping festival. Here we have rounded up the key findings.
“JD.com and Douyin cannot be overlooked. In two years, JD.com gained 10 percent of market share regarding 11.11 standing at 27.1 percent of the market in 2021. On the flip side, Tmall lost almost 10 percent of market share and is at 57.8 percent of the market today. According to a report from the app Soul about Gen Z consumer behaviour, 60 percent of Gen-Z still use Tmall/Taobao as their number one shopping platform, but over 20 percent of Gen-Z are shopping on Douyin & Kuaishou, and vertical platforms such as Dewu,” said Sandrine Zerbib, Founder and Chairwoman at Full Jet.
“During this 13th edition, Douyin really emerged as the 3rd big player. For 11.11 in 2020, Douyin set a record of 18.7 billion RMB in sales, the majority of which came from live streaming. This year the number should be even greater. This resonates with the current consumer behaviour. According to Bain company, more than 50 percent of shoppers are buying on 3 platforms or more for 11.11. The market is more open today, with JD.com and Douyin gaining shares,” added Sandrine Zerbib.
A shift in focus
“This year we saw a significant shift in focus, especially for Alibaba, with the company having moved its attention towards metrics beyond GMV to also consider sustainability and inclusivity targets. The evolution of its strategy aligns with consumer demand as 73 percent of consumers in Asia Pacific want brands to do more to make it easier for them to buy and consume sustainably,” said Mohammed Sirajuddeen, Growth & Digital Commerce Lead, Growth Markets, Accenture Interactive.
“More metrics than the GMV will be taken into account for Alibaba and brands to calculate the success of the event – for instance Customer Lifetime Value. This shift means that the 11.11 festival is no longer seen only as a one-shot event but a success that will set the brand on the road of success for the year.” said Sandrine Zerbib.
The rise of private domain
“Loyalty has now become the main game as there are less and less new consumers to recruit on the occasion of the Double 11. The shift that has begun this year is made to last, both for retailers and brands. This also resonates with the private domain trend that brands are investing in to offset the increasing cost of customer acquisition on big platforms,” said Sandrine Zerbib.
“Brands are less attracted by the major platforms like Taobao Tmall and JD due to the intense battle of volume price. They have become more focused on private marketing after first purchase. We can foresee that more and more GMV will be happening on brands owned channels like WeChat mini-app, WeChat group etc.,” said Sharry Wu, Greater China Consulting Business Transformation Leader at EY.
Enhanced shopping experience
“As e-commerce shopping festivals and online marketplaces become more commonplace and homogeneous, brands must build experiences that are connected and in line with what their consumers are doing and what they value. Short video platforms such as Douyin and Kuaishou have become significant marketing channels this year and we can expect more traction as live commerce continues to grow,” said Mohammed Sirajuddeen.
“We see consumers moving away from a pure transactional approach offered by marketplaces to a more engagement and entertainment driven environment for purchasing. This has obviously played in favour of Douyin, which is one of the big winners of this 2021 edition of 11.11. It has also led brands to offer consumers more and more new experiences supported by technology (such as 3D shopping features to create a virtual store mirroring brick-and-mortar boutiques, NFTs and metaverse),” said Sandrine Zerbib.
“This year’s Singles Day threw a spotlight on the quintessential role the supply chain plays in ensuring consumers enjoy the best possible brand experience. The speedy last mile delivery of goods and services is a crucial component of the brand experience. We observed that brands were working closely with marketplaces to ensure they have adequate volumes pre-stocked, could manage free returns and provide ease of orders across borders, and that they readied last mile distribution networks for the fulfilment of orders post Singles Day,” said Mohammed Sirajuddeen.
“As more brands leverage the advantages offered by digital commerce, we expect that they will continue to embed smart ways to help them control the supply chain and use technology to generate data that can help them glean actionable insights to deliver the experience that consumers seek,” added Mohammed Sirajuddeen.
“Purchases were mainly driven by discounts. Consumers are becoming a lot more wary of marketing communications and savvy to spot KOL/KOC marketing contents. Instead, they are relying more and more on friends’ recommendation, actual word of mouth and true deals. Another reason to explain why the discounts excel sheet from Austin Li & Viya for their 11.11 live streamings went viral before the beginning of the festival,” said Sandrine Zerbib
“Amid the ongoing pandemic and economic downturn, we see consumers have become more cautious. Chinese consumers are pondering when it comes to purchase decisions during 11.11 due to the concern of mendacious price drop and product quality,” said Sharry Wu.
What’s next for shopping festivals?
“The heat of 11.11 is cooling down for sure. Brands have to understand after years of practice, Singles Day is not their guaranteed sales booster. It is time to look at what specific value companies are presenting to consumers by leveraging the best technology and experience design in the digital world 3.0,” said Sharry Wu.
“The ongoing buzz around the metaverse is showing promise for brands looking to explore a blend of physical and digital experiences. The truth is, commerce success does not happen just by showing up on new platforms. Brands can make any place their point of purchase. But their ability to do so will depend on having the right strategy and the right partners and leveraging effective content that transcends physical and virtual spaces for meaningful customer experiences,” said Mohammed Sirajuddeen.
“Big festivals such as 11.11 will become an opportunity for brands to experiment. Alibaba and brands will invest and innovate more and more to enhance customer experience with loyalty to the fore. In the future, metrics like customer retention, customer lifetime value will be as important as GMV. To conclude, the end of the gigantic e-commerce shopping festivals in China is not for today, it is only the approach and aims from brands and retailers that are evolving,” said Sandrine Zerbib.