By Jiaqi Luo and Nick Withycombe
You’ll have noticed that we didn’t opt for a shout-y ‘big numbers’ headline that conveys no other information than China has a large population and many people bought many things. Whether hundreds of millions of people were buying billions of RMB of items or not (they were) is no simple bell-whether for strategy. Rather, luxury brands need to tread carefully during the sales mania of Double 11.
The most consumerist baby on Earth was conceived by Alibaba in 2009. If you’re new, then it’s called ‘singles’ day’ and falls on the 11th of November, with 11/11 marking out the ‘1’ of dreaded singledom into a hyped shopping fest. Now, it even has a reasonably nauseating ‘gala’ with colourful lighting and whichever western star is paid the most to perform in front of baying masses. This year it was Mariah Carey.
The celebration of sales at this year’s ‘gala’
This year, during yesterday’s 24-hour shopping event, Alibaba’s gross merchandise value (GMV) peaked at USD 30.8 billion in sales, which topped the 25.3 billion record set in 2017. According to CEO Danial Zhang, 46% of the sales came from post-90 millennials, and more than 80% of sales come from post-80s consumers. He also pointed out strong growth in the beauty and personal care category. At 3pm on November the 11th 2018, Tmall listed 167 brands as the “RMB 100 Million Sales Club”, with 29 of them being beauty brands.
Yet simple sales numbers alone don’t tell the story for luxury brands. Burberry, the iconic British luxury brand that has an official Tmall store, has never participated in nor even addressed Double 11. During the shopping fest, luxury brands are not only battling for customer attention with FMCG, but also the platform’s rules and regulations.
However, everyone loves a deal – even your affluent, luxury Chinese consumer. By 8am on November the 11th 2018, Lancôme, Estée Lauder, SK-II and La Mer all topped RMB 100 million (about $14.4 million) in sales. Opportunities exist to benefit from Double 11 if the offer is done in the right way: exclusive, sophisticated, and importantly, simple.
First of all, the Double 11 journey is a marathon, not a 24-hour flash sales event. While brands typically start their preparation for Double 11 months beforehand, consumers start their pre-shopping research in October. Across social media channels, China’s KOLs mostly concentrated their content on Double 11 shopping guides during the entire month. Many brands also prefer consumers to buy in advance and set the pre-sale date on October the 20th, thus consumers pay a deposit to ensure the product offer. Under the pre-sale rule, consumers would have to decide the shopping list way in advance in order to ensure their valid deals on Double 11.
Secondly, Double 11 is notable for its complicated platform rules. If we translate the Double 11 rules into western retail language, the consumer would be expected to conquer commerce gauntlets involving usually more than one of: Pre-payment discount (buy a voucher and redeem in a limited time only), membership points needed, figures such as RMB 50 off RMB 1,050, share on social media for a voucher number, 5% discount for inviting 5 friends, 20% discount on one purchasing platform only – and more.
Chinese consumers have long made fun of the ultra-complicated rules on Double 11 and trended the Internet with memes like “I wasn’t good at maths in school but I’m at my best during Double 11” or “I didn’t shop till I drop, not because of poverty but because of my low IQ.” Online personality Papi Jiang made a viral video to refer the day as The Mathematics Olympiad, which resonated with many.
There are also a few reality checks that brands should be aware of – for consumers, it is about stocking up. Most Chinese consumers go for Double 11 to stock up on day-to-day items, not to reward themselves with imported luxury; Alibaba’s official data shows that top categories on Double 11 are home electronics and food.
Yet this is the mis-leading element of Double 11. Because it takes into account the entire marketplace, luxury brands need to find their own special niche to let their audience take part in Double 11 ‘fun’, and show that they respond to uniquely Chinese shopping festivals.
In a sense, Double 11 is about giving, as well as receiving: while some in the truly top echelon of luxury brands can certainly get away with ignoring the season, others may simply seem out of touch – or ‘tight’ – if they don’t get involved.
Balancing brand desirability, sales traffic and consumer attention becomes a delicate act. The nature of Double 11 is to gamify online shopping and make it a social event. Luxury brands that want to win here have to recognise the festival’s complex design issues, differentiate a strategy away from the masses, and make the UX silky-smooth.
Here are some luxury brands that escaped the ‘crazy deals’ image and made exclusive shopping refreshingly clear:
1. Launch a Double11-edition product
Clé de Peau Beauté, SK-II, Givenchy
Givenchy’s Tmall homepage
Brands like Clé de Peau Beauté, SK-II, and Givenchy launched Double-11 limited edition products, with the product mix, packaging and campaign made especially for the event. They are taking dedication to the shopping festival to a whole new level, making Double 11 an occasion to launch new products and test out market reaction. Beyond just a sales day, Double 11 has become such a culturally iconic event that brands treat it as a sort of Super Bowl at which they showcase their latest innovation.
2. Exclusive Double 11 Gifts
Lancôme, Lamer, Estée Lauder, Babor
BABOR (and featured image above)
Releasing gift-sets dedicated to Double 11 is a popular practice among beauty brands. Mostly known for one or two headline products, these premium beauty brands have made Double 11 a chance for customers to try out other items in the form of gifting.
Some brands develop this concept by tailoring their gift messages especially for this occasion. Lancôme designed its Double 11 gift set under the theme of Paris, centering the message as “let Paris pamper you on your lonely day” to please all the single ladies. Premium skincare brand Babor, on the other hand, alternated different gift sets at different hours of the day, to emphasise the fun and surprise of the day.
3. Fuss-free Price Reduction
Samsonite, Furla, Belkin
Belkin’s Tmall, Samsonite’s Tmall
In the Double 11 battleground that’s mined with commercial tactics like coupon prices, social selling and discount arithmetic, simplicity itself is a gift. Premium brands like Samsonite, Furla, and Belkin made it simple by showing a maths equation with a final price. It’s a streamlined way to get in the spirit of the fest (and release stock) – as long as the proposition doesn’t dilute the premium image.
4. Remain demure and carry on
Not attending the party can be the answer for some. Iconic luxury houses like Burberry and Rimowa both have official stores on Tmall, yet neither deigned to mention the festival in their brand communication. Again, Double 11 is a double-edged question for brands that have exclusivity in their DNA.
Through the above Double 11 practices, these luxury brands have demonstrated similar characteristics: simplicity, temporality, and innovation. After all, the essence of Double 11 is about giving. But to do that with grace and style, luxury brands need to tailor the offer carefully in order to retain their soul.
Double 11 takeaways:
• Embrace simplicity
Double 11 is a huge, multi-platform, online to offline, more or less infinite business practice in China. It blurs the lines between commerce, entertainment and everyday lifestyle. Luxury brands have the advantage of attracting a select customer group that look for qualities beyond discounts and saving. Reward them with something special, like they are.
• Beyond e-commerce platforms, think WeChat
As a communication platform, WeChat has a much higher open-rate than e-commerce platforms, therefore can guide users to shop outside of the traditional shopping scenarios. Many luxury brands like Louis Vuitton and Dior already go for WeChat selling. WeChat’s one-to-one communication style gives luxury brands more control over the user experience such as pre-sales and after-sales service. It also grants a sense of intimacy with customers that is lacking in pure e-commerce platforms.
• Make a unique offer
Innovate the product mix or give an occasion-only gift. Creating a unique offer just for the Double 11 occasion is key for luxury brands to retain customers, and image. With the Double 11 culture taking ever-more importance in the cultural calendar, it might be treated as a festivity like Christmas and Chinese New Year. If customers don’t browse for the price alone, give them a reason to feel special at Double-11.
• The green wave is coming
Simply by watching our WeChat Moments in China, it’s clear to see that the affluent, first-tier modern generations care (and like to show they care) about sustainability. They are now aware that ‘buy buy buy’ means deliveries, packaging and waste. In reality, does that stop anyone buying? Highly unlikely. Yet, having an eco-friendly, green and caring lifestyle that’s good for the turtles and so forth is an element which is only growing – and at pace. Any brand addressing the modern generation of consumer in China quickly, and seriously, needs to look at their green credentials – and how their customer can reflect these in their lives and social media.