How to Get Ready for China’s E-commerce Holidays
Updated: May 8, 2020
You must have heard about Black Friday, Cyber Monday and Boxing Day, which are the biggest sales days for brands and retails in western countries. Amazon Prime Day might also ring a bell. However, last year, the combined sales results of Black Friday, Cyber Monday and Boxing Day (15.0 US$bn) in UK or Black Friday, Cyber Monday and Thanksgiving Day (17.8 US$bn) in US are nothing compared to what was achieved on Alibaba Nov 11 Global Shopping Festival (popularly known as Singles’ Day, 30.8 US$bn, 2018) or on JD.com 618 Festival (24.7 US$bn, 2018) in China, (refer to Figure 1 below),
Holiday promotion plays a vital role in China’s e-commerce market. If you don’t plan the holiday season in advance, you are missing out on the key opportunities to connect with your Chinese customers and boost your business. In this article, we will provide you with a list of China’s main e-commerce holidays, guide you through the preparations step by step, and help you avoid the pitfalls you might encounter as a newbie, to make you fully get ready for the most critical e-commerce season.
What are the Main E-commerce Holidays in China?
The detailed China's e-commerce holidays calendar is shown in Figure 2, where you can see it ranges from major holidays to minor ones across various e-commerce platforms.
Major E-Commerce Holidays
1. Singles’ Day (11 Nov)
Singles’ Day is the world’s largest e-commerce promotion event created by Alibaba group originally for single young people to celebrate their pride in being single. The date, 11 November (11/11), was chosen because the number “1” resembles an individual who is alone. Nowadays, it has evolved into both online and offline and has spread to other Chinese e-commerce platforms as well including JD.com, Netease Kaola, etc.
Singles day, a retail innovation, combines e-commerce and entertainment together and fuels the shopping frenzy. Alibaba usually holds a grand Gala on Singles’ Day and consumers enjoy the performances from singers, actors, and models and at the same time purchase and forward their favorite brands.
There are several pre-heat promotions before the big day. Different e-commerce platforms have their own rules, for example, JD.com starts the big promotion a week earlier and it lasts till the big day. Compared with the last few years, customers are provided with more innovative promotions but a slighter discount in 2019. However, their passion and craze for shopping on this big day haven't faded away at all.
Last year, the GMV hit a world record of over $30.8 billion in sales in a 24-hour shopping event, up 21.7% from last year(Figure 3). 237 brands surpassed RMB 100 million in GMV (roughly $14.2 million), including Apple, Dyson, Kindle, Estée Lauder, L’Oréal, Nestlé, Gap, Nike, and Adidas”, according to Essential Retail. There are 19,000 foreign brands that participated in 2018’s Singles Day and over 40% of Singles Day buyers purchased products from international brands, meaning cross-border e-commerce is becoming more important than ever.
2. 618 Festival (18 Jun)
In order to compete with Alibaba, JD.com created its own shopping event on 18 Jun, which is the date when JD.com was established. JD.com celebrated its first 618 festival in 2010, now it has expanded to an 18-day event, from 1 Jun to 18 Jun. Since it has become so popular among the Chinese consumers today, other giant e-commerce platforms, such as Tmall, started to follow suit, holding its own 618 Festival.
JD.com reported record sales for its 618 Festival attracting $29.2 billion in sales in 2019, with an increase of 18.2% than the sales performance of last year (Figure 4).
Besides, as JD.com Release reported, sales were driven by China’s lower-tier cities, where transaction growth was twice as high as the overall growth on this site.
JD.com put its new model “Consumer to Manufacturer(C2M)” to the test during this festival in 2018. C2M is a model with one end connected to the customer and the other to the manufacturer, providing customer insights through big data to brands so that they can adjust the marketing and manufacturing process to better meet unique demands of the Chinese consumers. This C2M strategy helped bolster transaction volumes of new products and C2M products by 289% compared with the 618 in 2017.
3. Double 12 Festival (12 Dec)
Double 12 Festival was created by Alibaba in 2013. It focuses on small and medium-sized independent vendors since these vendors may have a harder time standing out in the big brand-dominated atmosphere of Singles Day. It is also an extension for Singles’ Day, providing a good opportunity for brands to promote unsold goods from Singles‘ Day. Now it has become the third-largest e-commerce event.
Minor E-Commerce Holidays
1. Chinese New Year (Jan-Feb)：Most of the Chinese go back home to celebrate the new year with families for 7-10 days. Gifts, food and new year stuff are among the top-selling list.
2. Valentine’s Day (14 Feb): Chocolate, flower, jewelry and cosmetics are the most popular gifts.
3. Woman's Day (7-8 Mar): girls who are not married celebrate the day on 7 March; women who are already married celebrate it on 8 March. Many companies give gifts to female employees.
4. 520 Festival (20 May): 520 sounds like “I love you” in Chinese. It’s the parallel version of Valentine’s day in China.
5. Qixi Festival (X Aug): Chinese traditional Valentine’s day
6. Mid-Autumn Festival (X Sep or X Oct): moon festival and a time for family reunion. Traditional food like mooncakes are the most welcomed
7. National Week (1 Oct-7 Oct): To celebrate the birth of People’s Republic of China, everyone gets one week off from work. Usually, most people will travel and shop.
8. Black Friday (24 Nov-29 Nov): Most popular holiday for imported cross-border e-commerce products. Less competition for traffic and logistics.
9. Christmas (25 Dec): there is no days off during this holiday in China, but people can enjoy shopping because of the promotions and sales, especially from international brands.
Minor Platform Holidays
1. Kaola 328 Festival: Kaola, a cross-border e-commerce platform, celebrates its founding anniversary by offering discounts to its customers.
2. Suning 418 Festival/Suning 818 Festival: the electronic retailer, Suning, provides discounts on electronics and home appliances on 18 April and its founding day 18 August.
3. Xiaohongshu 66 Festival: Xiaohongshu(Red Little Book), a social and e-commerce platform, offers promotions on beauty and fashion products on its founding anniversary.
How Do You Prepare for China’s E-commerce Holidays?
Many brands and retailers want to take advantage of China’s e-commerce holidays to boost their sales, but how to stand out from the fierce competition especially when all the players rack their brains trying to attract consumers’ attention remains a tough task.
Here is a list that you might need to help you fully prepare for the holiday campaign kickoff.
1. A thorough plan(Figure 5)
Step 1: Application and Planning (Sep 1- Sep 21)
Apply for platform promotions, negotiate with platforms
Plan for marketing & logistics, set goals
Step 2: Selecting Products and Educating Customers (Sep 22-Oct 22)
Select top-selling products and stock up on inventory
Grow followers base by working with KOLs/KCLs to educate customers on new products and launches.
Step 3: Creating Buzz (Oct 23-Oct 31)
Send coupons & notifications about promotions via social media, SMS, etc.
Start warm-up promotions where customers place a deposit for final day sales
Step 4: Warm-Up Period (Nov 1-Nov 7)
Launch warm-up promotion for smaller-ticket, supplementary items
Ramp up marketing campaigns with KOLs to get customers’ attention
Step 5: The Big Day (Nov 11)
Launch biggest promotions, track sales data
Monitor customer service complaints, logistics issues
Step 6: Delivery (Nov 12-Nov 18)
Package and deliver, inform customers of the delivery process
Step 7: After-Sales Services (Nov 19- Nov 29)
Replenish inventory, thank customers, analyze results
Process returns, see what can be improved for next year
2. Suitable Pricing Strategy
Chinese consumers are price-sensitive but also brand-conscious. According to McKinsey, during the 2018 Singles Day, “The categories with the biggest price cuts were not only among the best sellers, but they also succeeded in driving additional market share.” Besides, McKinsey also states, “Parent and baby products, with an average discount of 33 percent, captured 18 to 19 percent of category sales in China, versus 6 to 7 percent on a normal day. Skin-care and cosmetics brands, with an average price cut of 30 percent, boosted their share to 12 to 15 percent, up from the usual 3 to 5 percent”(Figure 6).
Thus, you have to decide how heavy the price reductions are going to be to attract as many Chinese consumers as possible and at the same time maximizing your profit. If you don’t have deep cash reserves to compete through discounts, you may try less discounts plus free gifts or shift the emphasis towards new product launches. For example, last year, Dyson launched its new Airwrap hair-curling products which were sold for 1,500 units in three minutes.
3. Customized Marketing
For many international brands/retailers, if you want to crush the Singles’ Day, you have to customize your marketing strategy by delivering the right products to the right audiences at the right time in the right way. Be aware that you have to grow your customer base by creating buzz at least one month prior to the big day. There are types of marketing activities you may refer to before and during the big event to help you best resonated with your customers:
Make full use of social media by creating buzzworthy contents;
Don’t underestimate the power of KOLs/KCLs, who can help you get customers’ attention by doing live streaming or short videos;
Use paid advertisements, like banner ads shown at the front page of platforms, recommendation ads, ecosystem ads(brands can advertise on partner platforms, like Alipay and Tmall), etc., but this can be expensive, so we recommend that you apply for “free traffic” 2-3 months prior to the big events, and there is a chance you might get it;
Choose the most suitable types of promotions for your brand, like SecKill, coupons, discounts, free gift, buy one get one free, group-buying, buy a certain amount and get more free, etc.;
Redesign your store in a way that helps you gain traffic, like putting the SecKill or huge discount at the top front page, etc. ;
Launch warm-up promotion where customers place a deposit for final day sales;
Go Omni-channel by advertising and purchasing both online & offline.
What Aspects Do You Have to Pay Attention to?
1. More opportunities for international brands
As mentioned earlier, there are 19,000 foreign brands participated in 2018’s Singles’ Day and over 40% of Singles’ Day buyers purchased products from international brands, meaning cross-border e-commerce is becoming more important. What’s more, Alibaba reported that they will provide more opportunities for international brands by giving more traffic and importing new products.
This year, Tmall Global will focus on three things for Singles’ Day: incubating new categories, introducing new brands, and launching new products. Nine new product categories will be rolled out: oral care, men's care, hair restoration products, oral appliances, baby wash products, pet care, imported bedding, and more, which provides perfect opportunities for brands who want to break into the Chinese market.
2. Enhancing your mobile strategy
According to Alibaba, 80% of the transaction on Singles’ Day were accomplished by mobile. As China is a “no cash” country, almost everyone is using mobile to pay or purchase, so you have to ensure customers access to your online store in their most favorable way. In this case, you have to employ modern technologies and add specific features to enhance their shopping experience. Live streaming, interactive games, and digital marketing need to be incorporated in marketing strategy.
3. Maintaining good stock management
Last year, some brands disappointed customers because they ran out of the inventory. In order to avoid this situation, you’d better pick the top-selling products and stock enough inventory in advance. After the event, you also have to replenish the inventory timely just in case some customers miss the event and want to purchase at the normal price.
4. Working with the trusted delivery firms
During the e-commerce holidays, some international brands and retailers suffered from the bad reviews left by customers because the logistics providers could not handle the surge in demand, leading to slow delivery or package missing. In this case, you’d better pick the trusted delivery firms and move top-selling SKUs to warehouses in Hong Kong or free trade zones in China.
If you see yourself with a future in China and want to engage and craft unique experience with customers, then we strongly recommend you choose to participate in the e-commerce festivals that best fit your brand’s image and message. There are various e-commerce holidays in China, from big to small, it’s not necessary for all brands to go for big events like Singles’ Day. Finding the right channels and carrying out a thorough and smart marketing campaign is above all else.
If you are still not sure which promotions fit you and what the next move should be, EC LINKER is here to help you. Please visit our Consultancy &Service page or contact us by booking a consultation here.