An Eye for Quality | China Unlocked

By Yuan Yanan

屏幕快照 2020-02-14 下午1.00.40
Alibaba’s Tmall.com recorded sales of 268.4 billion yuan (US$38 billion) on the shopping festival.

November 11 has emerged as a ritual annual occasion for consumers in China to splurge. Since 2009, the designated shopping festival devised by Alibaba Group has been steadily gaining popularity and embracing rising transaction numbers year after year.

The most recent shopping day again caused jaws to drop when the online shopping platform Tmall.com reported 268.4 billion yuan (US$38 billion) in purchases, topping the aggregate of sales in the United States during the Black Friday and Cyber Monday events. The performance of rival Chinese e-commerce platform JD.com also caught attention due to sales revenue surging nearly threefold over last year.

In addition to buoyant sales figures, Singles’ Day brought new trends in consumption, providing a peek at China’s ongoing consumption upgrade and economic development.

New Consumption Trends

The tradition on Singles’ Day is for online shops to offer irresistible bargains. Qiao Lin, a Beijing millennial, paused his video game minutes before the clock struck midnight on the night of November 10. The second the new day arrived, he made some clicks on online shopping platforms to order basic commodities like shampoo, tissue and snacks. He also splurged on a Dyson vacuum cleaner and a Bose speaker.

A young woman surnamed Peng from Chengdu, capital of southeastern China’s Sichuan Province, made many purchases of discounted cosmetics and makeup products. Contrasting previous years in which she spent considerable time comparing prices, she went directly to trusted shops this year. “You know they have genuine products and deliver them fast,” she noted.

Low prices drive the shopping spree each year, but it is becoming more about consuming quality products. According to Beijing-based market research firm O&O Consulting, this year’s shopping festival showed a shift in purchasing trends from survival products to lifestyle improvements. Shoppers’ craze for daily consumables is cooling whereas sales of high-end personal care products, cosmetics, sportswear and equipment, health care and training services are surging, it said.

The emerging millennial consumer group is buying more high-end intelligent products. Statistics showed that the recent Singles’ Day saw sales of smart watches jump 93 percent, robot mops 143 percent, smart hangers 373 percent and smart locks 182 percent. Technology is making life more comfortable and efficient, for which consumers are willing to pay.

Alongside smart home appliances, demand for starter luxury, fashion and personalized products is increasing thanks to changing consumption ideas. More than 22,000 overseas brands from 78 countries and regions introduced campaigns to catch some of the shopping day craze, bringing Chinese consumers a selection of over 620,000 varieties of products. Big global names including Channel, Michael Kors and Acne Studios seized the opportunity by launching online stores on Tmall.com.

This year’s Singles’ Day also became an occasion to introduce new products. Apple Inc. released the iPhone11 on the day and raked in 100 million yuan (US$14 million) in sales in just a minute. Sales of Dyson’s new model of electric mops surpassed last year’s full-day numbers in just 10 minutes. Innovative and interesting products that can satisfy consumer demand for originality are winning businesses handsome profits.

“The focus of the shopping festival has shifted from price to quality,” noted Ma Daiqing, an analyst with 100ec.cn e-commerce research. “E-commerce platforms also took measures in terms of quality supervision and product tracking to ensure a satisfactory shopping experience for shoppers.”

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An online vendor
promotes a new
product through
live streaming
in Hangzhou,
where Alibaba is
headquartered.

Interactive Marketing

Marketing by online influencers via live streaming was another staple of this year’s Singles’ Day that proved incredibly effective.

On November 11, online heavyweights around the world pitched products and reviewed sale offerings for fans. Viya and Li Jiaqi, two notable influencers, ranked as the two most popular vloggers working with Taobao.com. In just a few hours, tens of millions online shoppers watched their respective live streams. They also invited celebrities to help with the promotions. A high-profile figure among them was American socialite Kim Kardashian West.

Live streaming has hinted at the coming consumption potential as it has been re-shaping e-commerce. Statistics showed more than 100,000 vendors on Taobao.com launching sales promotions via livestreaming on the past Singles’ Day. In just one hour and three minutes after midnight on the morning of November 11, purchases fueled by livestreaming promotions surpassed the figure from the entire day last year. By 8:55 a.m., sales had reached 10 million yuan (US$1.4 million). Online influencers have been managing to deliver far more effective promotions compared to traditional methods.

Chinese online influencers even spread the heat to foreign lands. Last May, Viya was invited to Thailand to participate in promotion activities. She recommended Thai goods to Chinese shoppers through a livestream and managed sales of 114 million yuan (US$16 billion). Among the bestsellers were more than 150,000 latex pillows and mats.

Another effective marketing strategy that is slightly less noticeable than pitches by online influencers is persuading buyers to share the links to their purchases with friends. If any friends also make a purchase after clicking the link, the original shopper receives a coupon or cash reward. The mechanism has proven an effective marketing strategy for brands such as Baicaowei, a popular snack maker, on the holiday. In the internet era, regular consumers are gaining louder voices. By sharing information about the products they buy and the shopping experience, they produce influential reviews and trustworthy endorsements for certain brands.

The new trends of interaction and sharing feedback illustrate consumers’ increasing attention on product quality and shopping experience, creating a window into the ongoing consumption upgrade in China. Only upgrades based on consumers’ demands that aim to create more value and benefit shoppers will win lucrative returns. This is the key factor that has ensured the records continue being shattered year after year.

Layout by Tian Yuerong

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