Sandra Weiss from Redfern Digital looks at how China’s popular shopping festivals, like 618 and Singles Day (Double 11), have evolved in recent years, and what that means for consumer brands operating in China
The landscape of shopping festivals in China has undergone a remarkable transformation over the years. What started as single-day events blossomed into month-long celebrations, marked by pre-heats, extravagant galas and a crescendo of discounts and promotions.
However, in recent years, a quieter revolution has been underway, with the shopping holidays now shifting towards more lowkey events that focus on conscientious consumption. Especially in the past year, consumers have become more rational in their purchases, leading to an increase in focus on cost efficiency and high value at low prices.
Despite the continued year-on-year growth of these festivals, there are signs of a slowdown, with e-commerce giants like Alibaba and JD.com scaling back on reporting gross merchandise value (GMV) for major events like 618 (‘Mid-Year Festival’ on 18 June) and Double 11 since 2022. This deceleration underscores the need for brands to adapt their strategies to navigate an increasingly competitive and saturated market.
What does this mean for shopping festivals in China?
While shopping festivals remain a cornerstone of the Chinese e-commerce landscape, brands must adopt a more strategic approach to their participation. Content and entertainment have emerged as essential tools of product promotion, with short videos and live streaming gaining prominence. During last year’s Double 11 festival, live streaming alone contributed an estimated GMV of RMB 215.1 billion (over £233 million), which was a year-on-year growth rate of 20%, while views of short videos on Taobao surged by 113% during last year’s 618 festival.
Although in the past, participation in 618 and Double 11 was a given for all brands, nowadays, careful consideration is required due to heightened competition and diminishing profit margins. Collaborating with key opinion leaders (KOLs) and live streamers during these peak periods often requires premium fees, while consumers expect steep discounts, squeezing margins.
An alternative approach that is gaining traction among brands is to host their own live broadcasts, offering greater control over messaging and content. By circumventing established live streamers, brands can tailor their broadcasts to align with their unique brand identity. However, starting off with brand live streams during the major shopping festivals may not be the best strategy for smaller brands. The lack of brand recognition will lead to the risk of being overshadowed by larger competitors, ending in low viewership and a lack of sales.
Instead, newer brands to market may consider starting off their shopping holiday journey by participating in shopping holidays such as Double 9 or Double 12, where they can make a splash without the intense scrutiny of 618 or Double 11. Alternatively, brands may also choose to participate in other holidays such as Qixi (Chinese Valentine’s Day) and International Women’s Day. These holidays allow for more theme-focused campaigns and increased opportunities for emotional storytelling that may resonate with Chinese consumers.
Even when not participating, shopping holidays can be used by brands as a barometer of consumer sentiment, allowing brand managers to understand emerging product trends and consumer behaviour patterns. Data provided through these holidays can be used to shape brand strategies for the remainder of the year.
The 618 shopping festival in 2024
With promotions having begun on 20 May and lasting until 20 June, the 618 shopping festival this year has got off to an impressive start. In preparation for the event, Alibaba made several major changes. The company provided its Taobao platform with its largest update in several years, simplifying the sales experience for customers and allowing merchants to design their stores more easily.
Moreover, Taobao and Tmall removed the pre-sales model, which had previously allowed users to place deposits prior to the start of campaigns to guarantee product availability in the case of the product selling out. The cancellation of this model comes as an attempt to increase competitiveness against other platforms and prevent consumers from switching to other platforms during the pre-sales period.
These changes were made with the intention of improving the user experience, thus encouraging prolonged browsing of the platform.
Within the first four hours of the 618 event kick-off on 20 May 2024, the RMB 100 million (£10.89 million) GMV target was already reached by over 59 brands on Taobao and Tmall, while 376 individual products reached over RMB 10 million (£1.09 million) in GMV each.
Even as we wait for the no doubt impressive total sales figures from this year’s 618 festival to come in, over the last two years, it has become apparent that consumers are less inclined to do a large percentage of their shopping during major shopping festivals. Instead, they look for discounts year-round. This has led to less focus on the likes of 618 and Double 11 and could be perceived as a slowdown. However, at RedFern Digital, we see this more as a normalisation. As the retail market steadies and consumers are less driven by the hype around major events, brands should focus on increasing recognition and awareness, steadily growing a loyal base of customers year-round. Content driven engagement, loyalty programmes, and unique campaigns or brand collaborations throughout the year can help with increasing brand value, while shopping holidays can be treated as add-ons.
This article was originally published in the June 2024 edition of RedFern Digital’s The Red Edition. Click here to download the full magazine.
