What’s the Story?

Singles’ Day, also known by Alibaba as the 11.11 Global Shopping Festival, has become China’s most important online shopping festival—with consumers flocking to major Chinese e-commerce platforms such as Alibaba’s Taobao and Tmall, and JD.com to take advantage of promotions. Now that the coronavirus lockdown has lifted, many brands and retailers are looking for the event to help them hit revenue targets. This year, we continue to see a variety of platforms joining the event, including short video platforms Douyin and Kuaishou, which have both announced plans to host shopping festivals in November to compete with e-commerce giants. In this report, we look at the rules for the events and the plans set out by each platform—including measures taken to better help brands and retailers capitalize on the biggest shopping extravaganza of the year.

Alibaba’s Taobao and Tmall

In the previous countdown report, we noted that Alibaba has changed the timeline for its 11.11 Global Shopping Festival this year to include two “explosion” periods for the official sale, with the first round taking place from November 1–3 and the second round starting on November 11. As a result, there will be two pre-sale periods, when consumers can preview promotions that will be offered, then put down deposits before completing purchases. We summarize the complete timeline in Figure 1. [caption id="attachment_117435" align="aligncenter" width="700"] Source: Alibaba/Coresight Research[/caption]   Alibaba opened applications for participation in its 11.11 Global Shopping Festival and unveiled its participation rule for merchants on September 18. Participating merchants need to keep in mind the registration deadline for both pre-sale products and regular products. Because of the timeline change for this year’s event, there are three different product registration periods:

• September 27 to October 13—products featured during the first round of pre-sale period
• October 13 to 23—products featured in the first round of explosion
• October 13 to 28—products featured in the second round of pre-sale and explosion.

Brands and retailers can register the same products in different rounds but they cannot have the same products featured in both the first round of explosion and the second round of pre-sale. Alibaba also has requirements for brands and retailers on Tmall related to product shipping:

• For transactions completed between November 1–3, brands and retailers must ship products within 48 hours
• For transactions completed on November 11, brands and retailers must ship products no later than 11:59pm on November 17

The rules are different for brands and retailers on Tmall Global. Brands should assess which products to allocate to different periods. We recommend brands and retailers select their most popular or iconic products for the first round of pre-sale and plan their inventory accordingly based on pre-sale data to prevent out-of-stock problems. For the second round, brands and retailers can adjust their inventory based on the feedback from the first round to maximize sales. Alibaba also unveiled the general discount plan for this year’s event. In addition to promotions in individual storefronts, participating merchants are required to join the platform-wide cross-store discount plan, which offers a ¥40 (around $6) discount for every ¥300 ($44) purchase. To direct traffic to Taobao and Tmall during Double 11, Alibaba announced a list of business units within Alibaba’s ecosystem and external partners including news, video-streaming and short video platforms, and offline and TV advertisements. Taobao App Main Page Revamp Alibaba has been testing a new layout of the Taobao app main page to improve user’s shopping experience to make it more immersive and personalized, while also helps to drive traffic for merchants. The upgraded main page has three noticeable differences:

• The top horizontal banner is now vertical and has been moved down.
• The “guess you like it” product recommendation feed section has been moved up and expanded. Content can now be displayed as pictures or short videos.
• The Mini detail page (discussed in the previous countdown report) after clicking products displayed in the “guess you like it” section.

[caption id="attachment_117436" align="aligncenter" width="700"] Main page of Taobao app before the upgrade (left); main page of Taobao app after the upgrade (right)
Source: Taobao [/caption]  

JD.com

On September 14, JD.com announced the plans for and rules of its Double 11 shopping festival. The timeline of the event, which lasts for almost a month, is similar to last year. JD.com will kick off the event on October 21 with pre-sale. The official sale will begin on November 1 and end on November 13, with a special sales period focusing on specific product categories for each day up to the sales peak on November 9–11. In 2019, the official sale lasted from November 1–15. The company will provide merchant support for finance, logistics, marketing, subsidies and technology tools. Some of the announced measures include:

• 10 free visual design tools offered for merchants to better present their brands and products to consumers
• Reduced commission fee on cost per sales (CPS) advertising on short video platform Kuaishou, online Q&A forum Zhihu, Weibo, and JD livestreaming
• ¥1 billion (around $147 million) in financial support to over 10,000 qualified merchants to help them increase return on investment

In addition, there are two types of shopping subsidy for consumers this year. Merchants can choose to offer cross-store discount plans of ¥40 (around $6) on for every ¥300 ($44) purchase, or a ¥60 (around $9) discount for every ¥1,000 ($147) purchase. Along with Alibaba, JD.com provides a 15-day price protection for consumers. [caption id="attachment_117437" align="aligncenter" width="700"] Source: JD.com/Coresight Research [/caption]  

Suning.com

Suning.com unexpectedly announced the launch of its Singles’ Day promotion on September 28. To boost the consumption and leverage the Golden Week Holiday, which is considered to be one of the biggest holidays in China for consumer spending, Suning set September 28–October 8 as the launch period for its Singles’ Day. The company has unleashed shopping subsidies worth ¥5 billion ($733 billion) on over 100 million products including accessories, beauty, clothing, electronics, food, home and jewelry. For example, an iPhone 11 (128GB) costs ¥4,649 after the discount, down ¥350 from the original price of ¥4,999. Airpods Pro costs ¥1,399, down ¥200 from the original price of ¥1,599. For products purchased during this promotional period, Suning offered its longest best-price guarantee—it will pay back the difference if the price drops up to November 12. Suning.com will start its pre-sale period for Singles’ Day on October 20. The official sale will be taking place from November 1–12, following the same as the timeline as last year. [caption id="attachment_117438" align="aligncenter" width="700"] Early Singles’ Day promotions on Suning.com app
Source: Coresight Research [/caption]

Douyin and Kuaishou

This is the second year that the short video platforms has participated in hosting a Singles’ Day event. Douyin and Kuaishou have been accelerating investment in their own e-commerce ecosystem via livestreaming. Douyin generated GMV of ¥10 billion from livestreaming in 2019, while Kuaishou’s livestreaming GMV reached ¥35 billion. Both platforms have set ambitious goal for this year: Douyin aims to reach GMV of ¥200 billion ($28.2 billion) in 2020 and Kuaishou has set ¥250 billion ($35.2 billion) in livestreaming GMV as its target. To capture a larger share of China’s booming social commerce market, Douyin and Kuaishou have been actively involved in shopping festivals this year, such as 6.18. Douyin even launched its own festival in August and banned links to third-party e-commerce site on its livestreaming channel from October 9, aiming to form a closed-loop e-commerce business. For Singles’ Day 2020, Kuaishou chose November 6 as its peak sales date to avoid directly competing with other platforms on November 11—calling it the 11.6 Shopping Festival. The whole event will kick off on October 30 with Kuaishou Night Gala, which will be livestreamed on TV and other video platforms. The warmup period will be held on October 31–November 5—users can participate in engaging activities and games to earn red packets that can be redeemed against purchases made during the official sale period. Kuaishou stated that it will distribute a total of ¥1 billion (around $147 billion) in red packets. Douyin’s Singles’ Day shopping festival will start slightly earlier than Kuaishou’s event. The warmup period will begin on October 25 and the official sales will launch from November 1–11. Some of the new measures this year are cross-store discounts, including ¥10 ($1.5) off every ¥100 ($15) purchases on eligible products and fan coupons, which will be distributed by livestreaming hosts to their followers.

What We Think

As the biggest shopping festival of the year, Singles’ Day have become a battlefield for Chinese e-commerce players. From September 30 onwards we have seen e-commerce giants Alibaba, JD.com, Suning, and short video platforms Douyin and Kuaishou opening merchant registration for the Singles’ Day shopping festival. With one month left ahead of the event, merchants should decide which platforms to join. Compared to traditional e-commerce sites such as Alibaba and JD.com, Douyin and Kuaishou’s e-commerce ecosystem is just starting to gain traction and is less mature in terms of customer service, logistics and supply chain. Each platform has a different timeline for the event—typically including a pre-sale or warmup period and official sales period, so participating merchants should plan their inventory accordingly.