Singles’ Day (also known as Double 11 or 11.11) is the world’s biggest shopping festival – that much became clear as soon as Alibaba launched its first Singles’ Day event 14 years ago in 2009 – so how has it changed, and what do you need to be aware of this year?
Although Alibaba recorded gross merchandise volume of RMB 540.3 billion (£64.9 billion) during 2021, this year looks set to be one of the most challenging yet since the launch of the festival in 2009. China has experienced a drop in consumer confidence in 2022 due to ongoing zero Covid-related disruption in multiple cities, alongside other challenges including high youth unemployment, difficulties in the real estate sector and a potential global recession decreasing demand for Chinese goods.
“China remains one of the world’s most dynamic and technologically advanced markets, despite political headwinds. Understanding China’s political, economic, and social developments will only become more important for businesses and investors as the world enters the post-pandemic era.” – Torsten Weller, China Policy Analyst, CBBC
Nevertheless, China is still the world’s biggest e-commerce market, and we can still expect to see some mind-bogglingly large sales figures, along with some new e-commerce trends. This is CBBC’s prediction of what to look out for ahead of Singles’ Day 2022.
Are Taobao and JD being knocked off the top spots?
Social commerce platforms like Douyin (China’s TikTok), Xiaohongshu, Kuaishou and even WeChat Mini-Programs are entering the shopping festival fray, putting pressure on Taobao and JD. Douyin is reported to be targeting an annual Gross Merchandise Value (GMV) of RMB 1.7 trillion this year. This presents challenges and opportunities for consumer brands, with the possibility of accessing new consumer markets through different channels needing to be balanced with the resources required to launch e-commerce strategies across several platforms. Nevertheless, as a recent report by Samarkand Global argued, a decentralised approach to e-commerce avoids the risk of being overly reliant on one channel or influencer to drive revenue.
More and better services
With consumer attention increasingly divided, the traditional players are having to look to new strategies to attract and retain customers throughout the e-commerce journey, including faster or more tailored logistics solutions. For example, CBBC’s Celine Tang points out that Taobao has added a new function that allows multiple delivery addresses for one order, making it easier for consumers to purchase for their families and friends while using discount coupons which usually have a minimum spend requirement.
Top consumer trends to look out for
As is often the case with Singles’ Day, millennials and gen z (particularly those born between 1990 and1999) will be the key customer group for many brands. According to e-commerce accelerator Pattern, this year, some of the key product categories this group is likely to be investing in include new and trendy instant coffee products, accessories for hobbies such as glamping and winter sports, home entertainment (including games consoles and e-sports equipment), and essential oils and home scents.
Aiming for loyalty rather than sales
Savvy brands are looking at customer loyalty as a more important metric than GMV ahead of this year’s Singles’ Day. Tmall has been promoting its membership programmes for brands, which allow brands to engage directly with their highest-spending customers and push out updates to increase engagement. According to Tmall, during the Singles’ Day 2022 presales, brands gained more than 66 million new members, with members contributing more than 50% of GMV for thousands of major brands.
“An increasing number of consumers are planning to purchase products on at least three different platforms (or even more than five). This is due to different discounts being offered and consumers being more loyal to brands rather than to platforms.” – Celine Tang, China Business Adviser (Consumer Retail & E-Commerce), CBBC
Live streaming is still the most popular promotional method
Despite going off the air for several months in 2022 due to a political snafu, China’s most famous live streamer Li Jiaji (aka the ‘Lipstick King’) is back with a bang for Singles’ Day, already attracting 460 million views for a lengthy live stream that marketed 291 different products, according to Dao Insights. Taobao Live looks to be having a good year all round ahead of Singles’ Day 2022, with several top live streamers formerly associated with Douyin making surprise moves to the platform.
Sustainability concerns
Critics have long pointed to the vast environmental impact of online shopping festivals like Singles’ Day, from the swathes of excess product packaging generated, to the emissions produced by delivery vans. Young Chinese consumers are increasingly well-educated on sustainability concerns and want to make conscious purchasing decisions. In response, Alibaba has launched initiatives such as labels to alert buyers to low carbon products, as well as vouchers for energy-efficient products. However, consumers facing a cost-of-living crisis are likely to be on the lookout for bargains rather than environmentally-friendly choices at present.
Call +44 (0)20 7802 2000 or email enquiries@cbbc.org now to find out how CBBC’s market research and analysis services can provide you with the information you need to succeed in China.
