The 618 shopping festival became the latest battleground in China's online commerce market after 11.11 singles' day.
For the bigs of Chinese e-commerce, the pool of potential new customers is shrinking more and more, forcing them to compete for the purchases of consumers already active on their platforms, trying to steal them from the competition.
This event represents another opportunity for Chinese marketplaces to strengthen their reputation and push consumers to impulse buying through coupons and discounts offered at specific times of the day.
618 is an event that began as a simple promotion for the June 18 anniversary of the JD.com marketplace (born in 2004) but has since become an event attracted by all the major Chinese e-commerce platforms.
Since the launch in 2010, Chinese e-commerce companies have grossed billions of Chinese yuan during this unbridled shopping event.
For marketplaces, the 618 shopping festival isn't just about winning the hearts and money of Chinese consumers. The platforms aim to follow the latest trends that could be valuable in adjusting their strategies for the second half of the year.
On Taobao, the largest e-commerce platform in China, consumers receive coupons via games and sweepstakes if they watch the live streaming channel. Alibaba said it has allocated 700 million yuan ($ 109.4 million) in consumer giveaways on Taobao for this year's 618 event.
JD.com not only offers shopping games and special offers, but also entices shoppers with bundled offers of vitamins, tea bags and a steam foot bath so that young shoppers can "feed Buddha-style".
Indeed, these platforms are becoming an emerging force that cannot be ignored, as live-streaming commerce has become an important channel for attracting new consumers, especially young people. We had previously wrote the subject with an article last May (you can read the article by clicking here).
Kuaishou, who tried to insinuate himself into China's already competitive e-commerce market three years ago, is promoting his own shopping festival called 616 for the second consecutive year, taking advantage of the number 6 considered lucky in Chinese culture. The event, which began on May 20, will last a month.
Starting earlier this month, Chinese netizens have been bombarded with online promotions promising them billions of yuan in shopping coupons and refunds if they find a better price on another e-commerce platform.
Most consumers follow the event to snatch the exclusive daily vouchers and red packs that will be released by the platforms with gifts that include cash prizes.
For the Chinese e-commerce giants, it is clear that the pool of potential new customers is shrinking, forcing them to compete for existing consumer spending. Amidst stiff competition, few can afford to be left behind.
Alibaba's monthly active users (MAUs) on retail markets reached 925 million in March, which is roughly 94% of the country's total netizens. The Pinduoduo social e-commerce platform had more than 720 million MAUs by the end of the first quarter, while JD.com is lagging behind with approximately 500 million active users on a yearly basis.
Event 618, which takes place June 1-18, has become a nationwide shopping spree across multiple platforms, similar to the November 11 Singles Day festival run by JD.com's rival Alibaba.
Every year, we start with promotions towards the end of May. This year, Tmall and Taobao, the two e-commerce platforms operated by Alibaba Group, have filled their apps and websites with live streaming offers and events to take advantage of the extravagance of this event.
Singles' Day, with the 11/11 date format reminiscent of "bare branches" to the Chinese, has become something of an anti-Valentine's Day celebration in which unmarried people can treat themselves to a gift for themselves.
The country's two largest spending sprees now serve as a barometer of the general mood of consumers and the health of the world's second largest retail trade.
While singles' day is compared to black friday (the friday following Thanksgiving) and boxing day on december 26th, the 618 shopping festival turns out to be China's response to Memorial Day sales in the United States.
618 is an event that allows brands and merchants to make themselves known to people living in less developed regions, who represent 70% of the total population of China.
During this shopping festival, stores on main e-commerce platforms cut their prices up to half to get more sales and reach new customers.
Sales revenue generated via live streaming on Tmall in the first hour of June 1 was equal to the average daily revenue of last year.
JD.com said that more than 4,800 brands on its platform experienced an increase in transaction volume of at least 500% on June 1 compared to the same day last year.
However, behind the rosy numbers there's a harsh reality. Online sales growth is slowing due to intensifying competition as new players joined the game. For platforms and merchants, it is becoming increasingly difficult and costly to grab the attention of consumers and thereby drive sales.
This event can be an excellent opportunity for brands that want to start selling in China, who can offer their products at discounted prices with the aim of getting to know and retain buyers for future purchases.
In addition to this, the 618 shopping festival is an excellent opportunity for testing market strategies and marketing operations. If the choices made prove effective, they will be replicated in the following semester, on the occasion of the most important events of the year from an e-commerce point of view (eg singles' day).
Tools like Noziroh Hub are essential for successfully selling products in China and managing export processes. The risks of failure are around the corner and only through in-depth market research is it possible to verify the feasibility of a project and avoid unexpected events.
With Noziroh Hub it is possible to manage all stages of marketing relying on a single reference: market research, opening/management of stores in the main Chinese e-commerce platforms, storage of goods, order fulfillment, opening/management of Chinese social profiles, packaging and private label.
Author: Alessandro Ave
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