On 12 October, the “big two” e-commerce platforms Taobao and Tmall Group of Alibaba and JD.com announced the launch of their respective Double 11 Shopping Festival campaigns, which took place two days later on 14 October. In fact, the up-and-coming social commerce platforms started the festival even earlier, with TikTok’s Chinese sister app Douyin starting on 8 Oct, Kuaishou on 10 Oct and Xiaohongshu (RED) on 12 Oct.
This not only signals the return of presales since platforms did away with it during 618 this summer, but it is also the longest Double 11 in history since the “Singles’ Day” shopping festival burst onto the scene in 2009.
After the fight-to-the-death low-price competition during 618 hurt both platforms and merchants, the largest e-commerce sales event of 2024 is seeing a shift in strategy that has persisted since last year.
Si vis pacem, para bellum, or vice versa
Back in September, the news of the next stage of putting the “inter” back into the internet came as Alibaba and JD.com decided to build bridges ahead of Double 11 this year. The integration between the e-commerce arch-rivals is as exciting as the interconnection between WeChat Pay and Taobao in early September.
On 26 September, it was reported that the Taobao Tmall App will officially introduce JD Logistics as part of its delivery services, while JD will incorporate Alipay, the payment system from Alibaba, parent of Taobao and Tmall Group. The reports were proven true on 16 October as JD Logistics is officially starting to provide services to Taobao and Tmall merchants.
It will likely benefit both platforms, as well as merchants and consumers alike
The logistics arm of JD has always been its advantage against rival Alibaba. Now Alibaba platforms can take advantage of efficient delivery and solutions from its rival. It will likely benefit both platforms, as well as merchants and consumers alike.
(Price) war is over, if you want it
Since the end of 618, Taobao and other platforms have shifted their focus from “lowest prices” online to optimising GMV (gross merchandise volume/value). This is because the fierce competition of absolute low prices has taken a heavy toll and disrupted the market, creating a state of “involution” (内卷, pointless competition) and everyone loses. Even JD.com, which continued its low-price strategy longer than others, has adjusted its algorithm to diversify from just low prices. It has simply become unsustainable.
It was earlier reported that all platforms are betting heavily on subsiding their merchants. The low-price discount strategy since last year and the “refund-only” policy from earlier this year were putting a significant strain on merchants as they dealt with returns and “refund only” that don’t require the return of goods. With tens of billions of RMB being given away in the form of subsidies and fee waivers, platforms are trying to support merchants to improve services and prices.
For JD, who has been profiting but seeing a lack of growth, it is important to find opportunities to invest in, in order to succeed this Double 11. Still holding onto its low-price strategy, the platform is also introducing more services to merchants including marketing and advertising fee waivers and even free use of its digital human tool for 15 days for merchants.
Where are the super livestreamers?
After the controversies surrounding major livestreamers such as “Crazy” Little Brother Yang and Xinba, how the rest of the super streamer class does this Double 11 has been closely watched by pundits and netizens alike.
Surprisingly, most of them did fairly well. Li Jiaqi, who recently took part in the hit reality TV show ‘Call Me by Fire’, enjoyed huge success on his channel on 14 October, when Taobao began its presale for Double 11 with many items selling out almost instantaneously. Similarly, Dong Yuhui of Walking with Hui and Luo Yonghao’s Be Friends also did very well during the first few days of the presale.
Li’s success was the much-needed boost in confidence for Taobao after Douyin and Kuaishou overtook Taobao in terms of GMV in livestream sales, in 2020 and 2021. Of course, Taobao has been diversifying its livestreams, by pushing fresh blood, as well as introducing more content and even “lifestyle livestreams” in the style of RED. However, none can replace the importance of super streamers in sheer volume. How to improve the quality of livestreams while diversifying is the question for platforms including Taobao.
“Quality consumption” is a step beyond “rational consumption” and puts more emphasis on value for money
This Double 11 marks a paradigm shift post-post-pandemic low prices. As we see young people looking into “quality consumption”, which is a step beyond “rational consumption” and puts more emphasis on value for money. Perhaps, for this reason, we have seen a return of international brands, exemplified in the beauty sector. But it is too early to tell definitively how the festival will perform this year but it is worth continued monitoring.
