China’s e-commerce giants JD and Alibaba turned in record-breaking results for the 6.18 shopping festival on June 18.
Total sales transaction volume during JD’s 6.18 trading reached a new high this year of US$29.2 billion. Key drivers leading to the breakthrough results were new products as well as Chinese consumers’ continued interest in and pursuit of higher quality.
Alibaba Group’s Taobao and Tmall shattered multiple records during the Mid-Year Shopping Festival, stating a rising demand from consumers in less-developed cities for quality products. More than 200,000 brands took part, using campaigns and tools provided by Alibaba’s core platforms to help more than 110 brands each generate gross merchandise volume in excess of RMB100 million ($14.5 million).
New products were a strong focus of JD’s retail strategy overall this year. JD has launched an exclusive channel within its platform to socialise and promote these products as well as bring them to market, making them easier for consumers to find, and helping brands to strategically reach new consumers. Consumers from lower-tier cities are also “trading up” showing greater interest in brands traditionally more coveted by consumers in higher-tier cities.
Transaction volume growth was twice as high in lower-tier cities than the overall growth on JD. The percentage of new users from lower-tier cities was also much higher than the percentage of new users overall. Two campaigns involved participation from more than 100 million users. One was an innovative “birthday red envelope” campaign, which encouraged and rewarded consumers for sharing on social platforms. Another campaign engaged users to share, vote for and win shared rewards for their cities.
The firm’s recent C2M initiative employs big data and consumer insights, providing insights to brands to adjust their manufacturing and marketing approaches with the goal of providing consumers with products they want before they even know they want them. Transaction volume of new products and C2M products during 6.18 increased 289 per cent compared with the same period last year. One out of every three monitors sold during this year’s 6.18 campaign were C2M products. HP saw a 100 per cent increase in sales of its Zhan 66 laptop, a C2M product, during 6.18.
Several new brands also launched on JD during 6.18. Most recently, Italian designer brand Prada, as well as Miu Miu and Car Shoe – two sister brands under the Prada Group – launched authorised flagship stores on JD. Farfetch also launched a flagship store on JD during the period, enabling JD consumers to access more than 3000 brands through Farfetch’s network of more than 1000 brand and boutique partners.
JD also worked with the world’s top hotel brands to empower subscribers of its premium membership program, JD Plus, with exclusive privileges at 15,000 high-end hotels around the world, marking the first time JD Plus benefits can be enjoyed outside of China. During this 6.18, shopping festival JD sold more than 2.8 million JD Plus memberships.
Technology continues to be key to improving the consumer experience and exceeding expectations during the sales festival. 91 per cent of orders coming from JD fulfillment centers were delivered same-or next-day. During this year’s 6.18, JD’s smart customer service robot fielded more than 32 million inquiries, of which it solved 90 per cent of those independently, freeing up human customer service for more complicated inquiries.
Flash sales crash records
Alibaba’s flash sales channel, Juhuasuan, which aids brands in attracting new customers via discounts, added over 300 million new consumers. During the festival. More than 180 products topped RMB10 million ($1.45 million) in sales, and 4700 products achieved sales of more than RMB1 million ($145,000). This was a record-breaking number for brand participation in Juhuasuan.
The firm’s Taobao live-streaming platform helped generate GMV of more than RMB13 billion ($1.88 billion).
“The results of the ‘6.18 Mid-Year Shopping Festival’ are encouraging,” said president of Taobao and Tmall Jiang Fan. It has proven to be a celebration that can match the enthusiasm and scale of the ‘11.11 Global Shopping Festival.’ More than 100 brands achieved a new sales record that surpassed the result from last year’s 11.11.
“We are very pleased to see that our strategy to help brands penetrate the less-developed markets has paid off. Customers in the emerging cities are very receptive to innovative products and promotion campaigns such as programs on the Juhuasuan platform. The number of customers and GMV from third- to fifth-tier cities both hit 100 per cent growth. We believe this group of customers will continue to grow into a strong and sustainable force for brands who are looking at further developing the Chinese market,” he added.
With an increase in discretionary income, consumers in China’s less-developed areas are quickly becoming a crucial driver of China’s solid consumption. These consumers were a main engine powering this year’s 6.18 Shopping Festival. According to Tmall, 48 per cent of the newly launched products on the platform during the event were purchased by customers outside first- and second-tier cities.
Demands and preferences from lower-tier cities consumer were diverse, ranging from high-end electric products from Apple to imported fruit, such as durian from Malaysia, and daily necessities, including socks and toothbrushes.
Tmall’s Luxury Pavilion sales more than doubled from last year, boosted by customers in emerging cities and shoppers born after 1995. Premier brands hit better-than-expected results. Sales of Versace jumped 20 times compared with last year.
This year, Taobao’s Daily Deals, a channel which allows consumers to order customised products straight from the manufacturers, generated more than 420 million orders. With Alibaba’s big data and IoT technology, the Daily Deals service has effectively digitised the manufacturing industry by initiating a direct manufacturer-to-consumer model.
Sales generated from consumers in third- and forth-tiers cities on cross-border trade platform
Tmall Global increased by 153 per cent from a year before. The top five countries on Tmall Global were Japan, the US, South Korea, Australia and Germany.
