Double 011: Revenge Shopping and Online Gala's
Black Friday's Billion Dollar Rival
Born in 2009, “Double Eleven” is now the biggest shopping festival in China, running November 1 to 11. This year, its component “Singles’ Day” (11-11 for the date’s representation of four single ones) bagged more sales for major e-commerce companies than ever before. Alibaba, for example, achieved sales of $74 billion between November 1 and November 11, almost doubling the 2019 record of $38 billion. Runner-up JD.com beat its 2019 sales with $40.97 billion. Other popular e-commerce companies like Pinduoduo and suning.com brought overall sales to over a trillion RMB ($153 billion) within the “Double Eleven” period.
Singles’ Day was created by Alibaba in 2009 with only 27 merchants as a retail therapy solution for people to celebrate and treat themselves and get distracted from their relationship status. In the decade since, it has become a perfect distraction and stress release approach for people of all types, providing an unmatched cultural experience.
This year’s Singles’ Day featured more than 250,000 brands during a time when the Chinese economy is showing strong signs of recovery after successfully controlling COVID-19 early on. Sales benefited from so-called “revenge spending,” in which customers starved for shopping during the lockdown overindulge in retail therapy. This pent-up demand has been reflected across all types of consumer goods and has sustained since post lockdown back in April.
Entertainment + Global goods
To help people release tension and to encourage spending, Singles’ Day this year was more entertaining, gamified, and interactive than ever. Following the tradition of hosting an attention-grabbing Singles’ Day Gala, Alibaba invited pop star Katy Perry to perform virtually to keep customers, as well as the 400 company executives and 300 celebrities hosting their own live streaming sessions, clicking. JD.com's live-streaming gala also gathered a list of top celebrities, including actors, singers, and athletes.
This year, Alibaba extended the promotion period, allowing merchants to run sales from Nov. 1 to Nov. 3, in addition to the promotions exclusive to November 11. This year also featured the participation of Tmall Global (a sub-platform of Alibaba’s dedicated B2C platform, Tmall), inviting international merchants to sell to Chinese customers who would normally spend a large budget overseas.
Earlier this year, Alibaba had set a goal to import goods worth $0.2 trillion in five years; to this end, it had charged a group of official buyers in more than 20 countries and areas to bring back luxury goods globally. As a result, Tmall Global’s sales grew 252% over last year, matching customers’ purchase preferences, which range from “going abroad to shop” to “global goods delivered to my door.”
Live-stream shopping FTW
Already bringing sales for thousands of brands and influencers daily, e-commerce live streaming was a major battlefield in the Singles’ Day shopping spree. Dubbed the “TV commercial's comeback,” live streaming is much more, since the advantage of mobile convenience allows users to access the platforms whenever and wherever. It transforms the static shopping experience, offering interactive actions like showcasing and Q&As, and helping the influencer to improve product selection and streaming performance.
Customers’ trust for the top hosts has become almost cult-like, where they will purchase whatever hosts recommend, as demonstrated by the sales numbers of Viya and Austin Li, the top two live-streaming hosts in China, on 11/11 alone: 1.106 billion RMB (~$170 million) and 0.696 billion RMB (~$106 million) respectively.
In addition to the loyal following of the hosts, platforms themselves have been encouraging shopping through live-streaming. Driven by Alibaba’s Taobao Live, GMV grew over 100% year over year and 33 streaming channels achieved sales over 100 million RMB (~$15 million) in sales.
For customers, live-streaming creates scenario-ized shopping experiences that help them visualize where the products, including cosmetics, electronics, cars, and even houses, fit in their lives, boosting sales by introducing use cases and prompting incentives.
For influencers, platform support is key. Taobao (Alibaba’s dedicated C2C platform) has launched multiple programs connecting talent ranging from top, medium, and small-sized followings with MCN (multi-channel networks) organizations, which has been the key to many influencers’ success at up-leveling their content and performance, thus bringing more sales to the platform. Douyin (the Chinese version of TikTok) and Kuaishou, another short-video platform, all have launched similar programs, supporting the live-streaming ecosystem.
Whereas Alibaba leverages influencers of all sizes to serve as streaming hosts, JD.com’s approach is rather interesting, focusing on quality by pushing niche industries and launching an unexpected live-streaming cast combo featuring CEOs + celebrities + influencers. So far, more than 500 CEOs have launched their own live-streaming sessions, bringing traffic and boosting more sales, as they can describe and promote their brands better than celebrities or influencers.
Compared with Black Friday in the US, where deals are the main theme, Singles’ Day squeezes deals into a bigger game boosted by content, interaction, discovery, and a sense of celebration. The simple fact of products being discounted is not enough to induce purchasing, because normally customers do so based on actual needs and planning.
By pushing live-streaming, brands and e-commerce platforms work together to create a virtual mall, leveraging content and algorithms to spur customers’ motivation to purchase, and holding their hands from the moment of planting the “want to have” seed to finishing the “must own” purchase action in a single all-in-one immersive session. No brand can afford to launch huge promotions and discounts all year round without losing money and diminishing the value of the brand; on the other hand, the customers acquired through live-streaming are valuable leads who can be targeted for various forms of marketing, including discounts, new product launches, and product customization, realizing the full potential of marketing.
The wave of new brands
This was a significantly successful year for new brands in the Singles’ Day shopping fever: during the first day of November, more than 357 new brands seized the No.1 spot in various niche categories, such as digestive snacks, instant hot pot, and kitchenware sterilizer. Alibaba calls these brands “Double Eleven Treasure New Brands.”
Interestingly, over 70% of these new brands utilized live-streaming during the Singles’ Day sales, completing the task of brand awareness, customer communication, and education in one interactive session. By the end of November 1, more than 1800 new brands passed last year’s sales record, 94 of which achieved growth of over 1000%.
With economic development and information sharing at today’s speed, customers are demanding products in niche categories more than ever. The diverse needs for those products have always been there, but with the help of new technology, brands are now able to make product decisions based on data and market to customers precisely. For example, Perfect Diary was able to pursue and succeed in the niche of affordable cosmetics because the data showed a significant amount of female consumers shying away from big names like L’Oréal or Estee Lauder, with no alternatives.
“The future 10 years will belong to the newly created internet brands,” said Fan Jiang, President of Alibaba’s Taobao and Tmall. Alibaba has been supportive of this growth, creating an ecosystem for their “Double Eleven Treasure New Brands” to foster, including access to certain perks including exclusive live-streaming, pre-sale, short-video sections, the ability to target “lookalike audiences,” as well as technical support.
In contrast, many DTC companies in the US who are considered the American equivalent of these Chinese digitally native vertical brands (DNVBs) are not feeling the pressure to participate in the deals festival. Compared with big retailers like Target, Macy’s, and Walmart, which are suffering from the loss of in-store shopping, DTC brands have the advantage of being online and they don’t need to compensate for the huge sales drop as brick-and-mortar retailers do throughout this year. By leveraging data they gather from customers, DTCs can survive this promotional period by creating precise product differentiation and super targeted offers that work perfectly with their customer support.
According to Digiday, many brands won’t be offering any special discounts during Black Friday. In fact, footwear company Allbirds even increased their prices in an effort to help fight climate change, signaling its devotion to acquiring and keeping the customers who share their brand’s values. During last year’s Black Friday, Allbirds stayed true to its view towards discounting and dropped three limited edition patterns of its Tree Runner Shoes. Aligning with the consumer sentiment that shopping this year is more about “what I need” than “what I want,” DTC brands see Black Friday as a retention play rather than an acquisition opportunity driven by discounts.
That’s not to say purchase behavior isn’t largely driven by intent. Someone who wants a new vacuum cleaner might wait until Black Friday for a discount, but the buying impetus is already halfway there. In contrast, Alibaba, along with other major Chinese e-commerce platforms, have hacked the idea of shopping into Chinese customers’ minds, where purchases can easily be driven by will through discounts and vivid introduction of new brands. So while Amazon continues to perfect its search engine algorithm, Alibaba and Pinduoduo are doing their best to gamify the shopping experience, manifesting product values through carnival-like entertainment.
US e-commerce playing catch up
How does Black Friday stack up against Singles’ Day？
In 2011, Black Friday sales were 13 times that of Singles’ Day.
In 2019, Singles’ Day sales were 5.1 times that of Black Friday.
Historically, because of the differences in purchase behaviors and for logistics reasons, e-commerce development in the US has lagged that of China. Adopting a similar strategy to Alibaba’s double promotion periods and in hope of saving underperforming sales caused by COVID-19, brands in the US started Black Friday sales weeks before the actual day, capitalizing on shoppers whose primary shopping channel is online.
According to CNBC, Black Friday online sales this year increased 21.6%, to achieve a new record of $9 billion, marking it as the second-largest online spending day in history in the US (behind Cyber Monday last year). Cyber Monday this year set an all-time record as the biggest online sales day in the US, with $10.8 billion in sales (a 15.1% growth from last year). At the same time, traffic to physical stores on Black Friday dropped by 52%.
With shopping moving online, major e-commerce and social platforms in the West have been toying with new features and experiments to help boost shopping. In early November, Instagram, the major playground of influencer marketing, moved the Shopping tab and the Reels tab (TikTok’s competitive feature), to the homepage, making it easier for users to discover products, shop directly from influencers’ feeds, and view the viral short videos. Already having its Marketplace, Facebook also added the ability for users to buy products directly from a business’ FB page.
TikTok partnered with Shopify in late October to allow more than 1 million merchants to create targeted campaigns based on gender, age, and user behavior data; TikTok merchants will also be able to track performance like views and clicks over time. It has also been experimenting with adding a shopping button, enabling TikTok creators to link their Shopify store links from the videos.
Still, the seemingly heated influencer marketing in the US is nowhere near China’s. Compare watching a livestream on Amazon with that of the Lipstick King.
Amazon’s live-streaming resembles traditional TV commercial shopping, focusing on less than exciting explanations of product function, rather than the sense of excitement and urgency to purchase created by Chinese live streamers through their experimental, passionate, and almost mad “whatever it takes to sell” streaming sessions.
Versus Austin Li, a former beauty adviser in retail who has been known as “the king of lipsticks” for his crazy approach to showcasing products, sometimes trying 300 lipsticks a night. His honest recommendations and knowledge of the products are paired with a comedy show style of entertainment that ignites viewers’ intention to purchase.
Additionally, with the help of MCNs, influencers in China have an entire ecosystem to help them when it comes to creating content, establishing brand deals, and guiding transactions. Like a combination of bootcamp and incubator, MCNs in China help optimize every step of an influencer’s journey, from scouting talent, providing influencer 101 training, creating content and strategy to increase the influencer’s following, connecting them with brands, setting up targeted ads to monetize, and even managing the operations of influencers’ online stores.
The most famous MCN, ruhnn.com, which created the first generation of popular influencers in China, was listed on NASDAQ last year and has Alibaba as an investor.
The pandemic has made social media, an already important channel, an even more important information source for customer decision making. The rest is left to the platforms to build out the infrastructures that give everyone the chance to take social commerce to the next level.
Jeffrey Towson, a famous private equity investor and former Peking University CEIBS professor, pointed out that “Amazon is the marketplace for people to buy things they need, but nobody associates it with having fun. GMV is not the only key metric - the length of time a user is active on your platform is just as important of a metric. If a platform can keep users on their platform, shopping will follow naturally” (translated by us). If we’ve learned anything from the Singles’ Day sales, it’s the interactive nature among platforms, brands, influencers, and customers, blurring the boundary between social and commerce.
It’s also noticeable that the shopping madness driven by deals and promos happens more often in China than the days leading up to Singles’ Day. Following Singles’ Day on November 11 is “Double Twelve,” which falls on December 12. Treating all Eastern and Western festivals as occasions to celebrate, brands and e-commerce platforms in China have made Spring Festival, the Chinese New Year, Valentine’s Day, Labor Day, Children’s Day, Halloween, Thanksgiving, and Christmas all about retail therapy and treating oneself.
If that’s not enough, companies like JD.com have decided to make their own holiday, creating a shopping festival filled with deals on June 18 every year, the day the company was founded. The frequent and intense shopping cycles naturally train the customers to be in a mental state of always thinking about shopping, actively searching for deals, and making mental shopping lists.
We have arrived at the era when “shopping is driven by desires, not demands,” thanks to information overload, boisterous social content, and influencer marketing. With platforms capable of allowing brands and influencers to easily channel content into purchase behaviors and set up the right cadence of shopping cycle rollouts, we’re looking at a new shopping ecosystem. This new world will be marked by the integration of content and purchases, as well a new generation of customers who are more social, active, and interactive.