In China’s e-commerce realm, the 618 Shopping Festival is an event of monumental scale and impact. It owes its inception to the Chinese e-commerce giant Taobao, which was founded on May 10, 2003.
Taobao emerged as a defensive strategy against potential C2C competition from eBay’s Chinese platform, Eachnet. Taobao’s innovative strategies, such as introducing Alipay to ensure secure transactions, helped it secure a substantial market share.
On the 20th anniversary of its founding, Taobao is set to host the most significant 618 Shopping Festival to date. The festival’s evolution mirrors the transformative growth of e-commerce, driven by platforms like Taobao, which have revolutionized how people shop and interact with retailers.
For 2023, Taobao’s strategy for the 618 Shopping Festival revolves around transforming consumers into creators.
In an era where user-generated content has become integral to online engagement, Taobao aims to elevate the shopping experience beyond a simple transaction. This shift aligns with the broader trend in e-commerce, which has been accelerated by the global pandemic, towards more interactive and personalized shopping experiences.
Regarding impact on China’s economy, the 618 Shopping Festival’s contribution to Alibaba’s total revenue is significant.
The event has grown exponentially since its inception, reflecting the rapid growth of China’s e-commerce sector. The 2023 edition of the festival is expected to further boost this growth trajectory, given the increased scale and novel consumer engagement strategies planned for this year.
The allure of low prices has always been a critical characteristic of online shopping festivals. However, in recent years, the price war has extended from festival periods to daily transactions, with short-term subsidies transitioning into long-term ones.
This shift has led to debates around the necessity of these online shopping festivals, especially as low prices have become somewhat of a norm in the aftermath of the pandemic.
Yet, low prices often come with certain preconditions or basic requirements. For instance, JD.com’s low prices have traditionally been established on multi-item discounts.
However, this year’s 618 Shopping Festival may improve the quality of service (such as half-day delivery service by Cainiao) and lower the threshold for discounted prices based on purchase quantity.
This approach focuses on the keyword “low price,” enhances service quality, and broadens the customer base. Despite low prices becoming a norm, festival periods offer an upgraded shopping experience compared to ordinary days.
In the current environment, improving the return on investment (ROI) for marketing communications remains a significant challenge for the entire industry. This challenge is primarily due to the broader economic environment, which has led to a trend of consumption downgrade.
The biggest dilemma is identifying target customers and stimulating consumer enthusiasm in challenging circumstances. The difficulties in content creation for product promotion and fulfillment of product promises play a significant role.
While merchants have adopted live streaming and digital marketing, attracting traffic in a fiercely competitive market using forms the audience enjoys is a major challenge.
Another concern is maintaining operations after traffic conversion, such as improving the customer experience (product quality and fulfillment, after-sales service, etc.). The entire process involves a long chain of stages, each demanding high professionalism and the ability to respond flexibly to market changes.
As the 618 Shopping Festival approaches, how should merchants prepare in advance? It is crucial to ensure sufficient preparation for product stock and transport capacity. For product inventory, merchants should rely heavily on data-driven predictions to stock up sufficiently in advance.
This preparation should not only be adequate in terms of quantity but also detailed in terms of warehouse distribution and logistics delivery.
At the end of 2022, during the Double 12 shopping festival, some users received their goods only after a month, leaving a bitter taste about the “express” delivery.
Most major platforms have deployed highly automated and intelligent warehouse logistics systems in key consumer markets. Barring uncontrollable factors such as adverse weather, delivery delays should be less frequent.
The issue during the 2022 Double 12 festival was partly due to the widespread transmission of the pandemic. Given the current state of pandemic transmission, a similar situation is unlikely to occur.
Nevertheless, express delivery companies should prepare and plan equipment maintenance, debugging, and personnel deployment. Platforms and merchants should prepare and plan sufficiently for sales predictions and stock-up.
This year no specific GMV or sales data are released from any major e-commerce platforms in China.
Alibaba Group’s Taobao and Tmall Business Group recorded an unprecedented level of merchant participation in China’s mid-year shopping festival, the 6.18, held from May 26 to June 20, spotlighting positive signs of Chinese consumers’ post-pandemic spending prowess.
Data released by Taobao & Tmall on Monday exhibited a paradigm shift in consumer behavior, particularly a surge in livestreaming viewership and short video consumption.
During the 6.18 festival, the daily average of short video views on Taobao, a consumer-to-consumer marketplace, increased by 113% from the previous year. Daily short-form video releases from influencers and Taobao merchants have increased by 200% and 55%, respectively, year over year.
Moreover, the festival witnessed a 139% year-over-year increase in content creators initiating livestreaming on Taobao. Consumers’ viewing time on the app doubled, demonstrating the growing influence of digital content in the e-commerce landscape.
The Gross Merchandise Value (GMV) of merchants reportedly swelled two to three-fold year-over-year. A total of 305 brands achieved sales above RMB 100 million ($13.99 million) just after the stroke of midnight on June 18.
Additionally, over 2.56 million small- and medium-sized enterprises (SMEs) outperformed last year’s festival, with 1.18 million SMEs each surpassing a GMV of RMB 10,000.
The festival also shed light on new consumer trends, with items like watersports shoes, suitcases, and sunscreen masks being the hot favorites. Around 180,000 customers purchased watersports shoes, while suitcases and sunscreen masks were snapped up by 1.65 million and 930,000 people, respectively.
Apple, which held a rare livestream and offered discounts on its products, including the iPhone 14 Pro and Apple Watch Series 8, saw their broadcast attract 1.3 million viewers and collect 300,000 likes within the first hour.
In this year’s 6.18 shopping festival, video-sharing platform Bilibili saw a surge in its e-commerce advertising revenue, which jumped by more than 400% year-on-year.
Product promotion is becoming a new revenue growth engine for both Bilibili and its content creators, with the number of promoters more than tripling compared to last year’s 6.18.
As the consumption and transaction ecosystem thrives, the number of promotional videos on the site has increased nearly eightfold year-on-year, while the number of promotional livestreams has grown almost 7.5 times over the same period.
During the 6.18 period on Bilibili, the number of content creators who received orders from advertisers through Huahuo increased by over 40% year-on-year.
According to data from the “Spark Program,” which is linked to the Taobao Union (Taobao’s affiliate program), in industries such as home decor and cosmetics, Bilibili accounted for more than 70% of new customers for merchant shops.
Zhihu, a Chinese question-and-answer website, saw a 155.1% year-on-year increase in queries related to “how to choose products.” By the end of May, the volume of content related to “618” on Zhihu had increased by 272% month-on-month, while search volume had risen by 240% over the same period.