albert Chan
What’s the Story?
In our monthly countdown to Singles’ Day, also known as the 11.11 Global Shopping Festival, we will help brands and retailers to prepare for the event and make the most of the huge opportunities it represents. We anticipate that this year’s Singles’ Day will feature a variety of new products in niche and general categories, from Chinese and overseas brands and retailers. In this report, we discuss demand for niche and international products, driven by young Chinese consumers, and partnerships between Chinese e-commerce giants and international brands to increase the exposure of new products to consumers. We also look at recent innovations in the China market that may be marketed through Singles’ Day 2021.Why It Matters
In recent years, Singles’ Day has evolved into the prime opportunity for brands to launch new products—generating consumer excitement and boosting sales during the festival. Following this trend, we expect the shopping festival to feature a plethora of new products this year.- According to JD.com, more than 300 million new items were launched on its platform during Singles’ Day 2020.
- Last year, more than 200 million new items were released on Alibaba’s Tmall platform in 2020 (see Figure 1)—around double the amount from the 2019 event—and over 50% of merchants launched new products, according to Alizila (Alibaba Group’s news hub).
Figure 1. Number of New Items Launched on Tmall (Left Axis; Mil); Sales Contribution from New Products on Tmall Flagship Stores (Right Axis; % of Total Sales)
[caption id="attachment_132515" align="aligncenter" width="726"]
Source: AliResearch/Alizila/Tmall[/caption]
Two Months to Singles’ Day: In Detail
Appealing to the Younger Generation: New Niche Products, Especially in the Beauty Sector We expect a high number of niche products—specialized, highly innovative products—to debut during Singles’ Day, driven by demand from millennials and Gen Z in the China market. In China’s beauty sector specifically, Tmall aims to help incubate 200 emerging brands capable of generating over ¥100 million ($15.5 million) in sales over the next three years. It will “support more than 10,000 new and emerging brands to become leaders in their respective, niche categories,” according to Alizila. In addition, Alibaba announced in January 2021 that cross-border e-commerce platform Tmall Global and logistics unit Cainiao Network had launched a “perfume route,” a dedicated flight for transporting fragrances between Europe and China daily, which is set to reduce delivery times of imported products. Overseas Retailers Target the China Market: New Products and Partnerships Alibaba and JD.com are partnering with overseas brands to mutually benefit from increased exposure and help them launch new products in the China market. The e-commerce giants offer comprehensive support across market research, product development and marketing. On June 7, 2021, JD.com and Walmart launched their new omnichannel marketing model “Jing-Wo New Initiative,” which will see JD.com help brands integrate product-launching resources across channels and expand the touchpoints and exposure of new products among consumers. Walmart will support this marketing campaign by leveraging its 400+ stores across China as well as its online stores, according to JD.com. In May 2021, JD.com signed partnership agreements with multiple global brands during the Hainan International Convention and Exposition Center, including Fonterra, Ferrero, GOO.N, Mars, Nestlé, Perrier, SC Johnson and Wigley, according to JD.com. Among these many partnerships, JD.com’s decision to deepen product co-creation systems with chocolate and confectionary company Ferrero stands out. The companies have agreed to collaborate on big data marketing strategies and a data-driven new product co-creation system, as well as research and development and co-creation of new products. Given the high number of imported food channels JD.com has partnered with this year, we assume that many new confectionary products will be unveiled during Singles’ Day 2021. [caption id="attachment_132517" align="aligncenter" width="726"]
JD.com executive (left) and Ferrero executive (right), at Hainan Expo Source: JD.com [/caption] Alibaba has confirmed that its membership-based cross-border e-commerce marketplace, Kaola Global, will co-create 500 new products this year with manufacturing partners worldwide, many of which will be unveiled on Singles Day 2021. According to Alizila, “Kaola users increasingly search and shop for specialty imports such as juices from Cuba, honey from Australia and shower gels from Israel.” Alibaba has also partnered with international brands through Tmall Hey Box and the Tmall Innovation Center (TMIC). Tmall Hey Box is the platform’s dedicated gateway for consumers to discover new products and is one of Tmall’s popular suite of tools for product launches. The portal presents a variety of new products to consumers, with customized recommendations provided by Alibaba’s big data and artificial intelligence technology. With over 180 million active members, Tmall’s Hey Box helps generate exposure for new product launches, according to Alibaba. The platform has helped introduce several international brands to Chinese consumers through its innovative gamification features. US brands Converse, NIKE and Starbucks have used Tmall Hey Box’s raffle tool HeyDrop to create anticipation for products. Italian luxury brand Valentino Beauty used HeyBox to roll out a full range of beauty products in August 2021 and raffled off 2,000 of its limited-edition makeup bags on HeyDrop, according to Alibaba. TMIC was created in 2017 by Alibaba to provide companies selling through Tmall with a range of market research and consumer-feedback services. TMIC helps brands shorten the launch cycles of new products from 18 months to six months, on average, according to a June 2020 study by Harvard Business School. Givaudan, a Swiss fragrance and aroma manufacturer, announced its new partnership with Tmall in June 2021, through which it aimed to accelerate the perfume creation process by analyzing consumer behavior data. The company indicated that it would be able to cut down its design process for fine perfumery products from 40 weeks to four. Last year, TMIC partnered with 200 top-tier corporations and created over 40,000 products, according to an executive from Alibaba. We expect more international brands—particularly in the fashion, cosmetics and snack (food) sectors—to partner with Chinese e-commerce giants in the lead-up to Singles’ Day and beyond to increase product development efficiency and consumer anticipation of products. Recent Product Innovations Likely To Feature in Singles’ Day Sales We look to Alibaba’s sponsored annual festivities for possible new trends and products that may be marketed on Singles’ Day this year. Tmall hosted its annual fashion event, “The National Style Award,” in Shanghai on July 25, 2021, to celebrate the revival of “hanfu,” traditional Chinese dress. The event saw more than 200 hanfu bloggers debut custom designs. Hanfu also featured heavily in Alibaba’s “Taobao Maker Festival,” a celebration of young entrepreneurs, on July 17–25, 2021—highlighting that hanfu is a current trend. There are now over 3.56 million hanfu enthusiasts in China, according to CCTV reports, and we anticipate that many brands will market new hanfu designs during Singles’ Day 2021 to capture share of these consumers. The Taobao Maker Festival featured many innovative products in response to pandemic-led consumer trends—for example, with a focus on healthy and work-from-home lifestyles. We present some examples below.
- Yesol’s treadmills for dogs enable pet owners to ensure that their dogs are getting enough exercise during lockdowns and amid consumer caution about spending time in public places.
Source: Alizila/Yesoul[/caption]
- Purlab’s laptop-shaped scratching board for cats, “Catbook,” helps keep cats off real laptops while owners are working from home.
- Nice’s broccoli-flavored ice cream offers a healthy, low-calorie treat.
Source: Alizila/Nice[/caption]
- Free Spirit’s “glamping” products, which made their debut during Alibaba’s 6.18 Shopping Festival, provide more space and comfort than traditional tents for consumers who want to spend time outdoors.
Source: Alizila/Free Spirit[/caption]