SOURCE / ECONOMY
Double 11 festival embraces new consumption habits, as market opportunities remain for overseas brands
Still a golden period for overseas brands to grab profits
Published: Nov 11, 2022 10:52 PM
Workers sort packages at a distribution center of SF Express in Beijing on November 10, 2022. Logistics firms are fully prepared for China's annual e-commerce bonanza known as Double 11, which is right around the corner. Photo: cnsphoto

Workers sort packages at a distribution center of SF Express in Beijing on November 10, 2022. Logistics firms are fully prepared for China's annual e-commerce bonanza known as Double 11, which is right around the corner. Photo: cnsphoto


Once known as China's most important online festival, in which people maxed out their credit cards and outlandish activities like a huge gala and a countdown ceremony was held, this year's "Double 11" online shopping festival turned out to be more restrained and rational, though certain sectors have witnessed stunning growth, reflecting the new trends of spending in the midst of China's consumption upgrading.

Experts said this is a very natural thing for Alibaba and other domestic online giants, who are the main players of the annual online shopping festival, as China's consumption sector has said goodbye to a period of reckless growth, and is now upgrading to a new stage with new characteristics like focusing on quality. They also noted that the Double 11 festival is still a golden period for home and overseas brands that can capitalize on those new shopping trends to make profits.

According to data released by Alibaba, the gross merchandise volume (GMV) for 2022's "Double 11" online festival was "the same as last year."

This indicates a sharp halt in the growth rate of the online gala's GMV. Last year, Tmall's Double 11 GMV stood at about 540 billion yuan, up 8.4 percent compared with the previous year.

Trade has still been active despite the slowdown in overall sales numbers. Alibaba described this year's Double 11 as the one with the most diversified online sellers, with nearly 300,000 brands and 21 million products featuring in the festival.

Workers sort packages in an e-commerce industrial zone in Lianyungang, East China’s Jiangsu Province on November 11, 2022. Photo: Xinhua

Workers sort packages in an e-commerce industrial zone in Lianyungang, East China’s Jiangsu Province on November 11, 2022. Photo: Xinhua


Also, more than 16 million people purchased green products on Tmall during the Double 11 festival. Hot products included energy-saving air conditioners and washing machines, Alibaba disclosed.

Furthermore, the Double 11 online festival continues to be a gold mine for overseas brands, with more and more brands ranging from luxury to fast moving consumer goods participating in the country's largest online gala. This year, all the five major global luxury giants, including LVMH and Kering, took part in the Double 11 festival on Tmall.

According to data revealed by JD.com, Apple's turnover exceeded 1 billion yuan ($140 million) on the platform just one minute after the Double 11 started this year.

Ye Gen, founder of domestic paint protective film company Moxiaoer, said that its GMV surged by about 60 percent during this year's Double 11 online festival to about 32 million yuan, which is "not bad."

According to Ye, his company's business growth has benefited from the rapid rise in China's new-energy vehicle industry in recent years.

"Seen from a mid- to long- term perspective, the penetration rate of the e-commerce sector in China has been very high, and consumption is becoming increasingly decentralized. I think it will be a victory of this year's 'Double 11' if GMV can 'stabilize' compared with last year," Hu Qimu, deputy secretary general of digital-real economies integration forum 50, told the Global Times.

This is considered by some experts as a very positive change, as it shows that China's e-commerce industry is entering a new stage of development.

"The 'Double 11' promotional campaigns by platform economies are no longer just pursuing high GMV, but instead pursuing high-quality development. This is because China's e-commerce industry has entered a high-quality development phase," Guo Tao, a veteran internet expert, told the Global Times on Friday.

The Chinese government has repeatedly rolled out measures to push consumption, a sector that has taken a huge blow from the coronavirus outbreak in past years. In particular, officials are seeking to upgrade domestic consumption with preferential policies introduced in certain sectors like cars, low-carbon and sports.

According to the report to the 20th National Congress of the Communist Party of China, China will work to expand domestic demand and better leverage the fundamental role of consumption in stimulating economic growth and the key role of investment in improving the supply structure. The report also stressed that the country will "encourage green consumption."

Officials also stressed during State Council meetings earlier this year that China will strengthen supportive policies for automobile consumption to further release potential in this field, as well as encourage sports consumption.

Those trends have all been clearly reflected in this year's "Double 11" shopping festival data. According to Alibaba, sports and outdoor has become one of the four new areas that saw stunning spending growth during the online festival.

In the first hour after Tmall's "Double 11" festival started this year on October 31, the sales turnover of running outfits surged by 45.2 percent compared with the corresponding time last year, while camping and skiing products surged by 115 percent and 61.9 percent respectively.

Likewise, environmentally-friendly products also reported a boost this year. Suning saw sales in green and energy-saving home electric appliances surge by 126 percent, according to a note sent to the Global Times on Friday.

Tmall also disclosed that sales of new-energy vehicles soared by 200 percent in just 30 minutes after the online festival began.

The overall scale of Double 11 is declining, but the consumption pattern is rising, and the growth rate of some emerging sectors has been unexpected, such as pets, sports and prepared foods, which have seen explosive growth, Chen Jia, an independent research fellow on international strategy, told the Global Times on Friday.

Chen recalled that 10 years ago, the main players were e-commerce giants such as JD.com and Taobao, but now, there are new players such as livestreaming platforms Douyin and Kuaishou. "It is not the end of the shopping festival, but the start of a new pattern featuring Chinese-style innovation," Chen added.

Many Chinese overseas brands also performed well during this year's Double 11. Data from Lazada, the flagship e-commerce platform in Southeast Asia, showed that in the 12 hours of the Double 11 sale, about two-thirds of Lazada's merchants had achieved at least three times the order volume of most weekdays. Spending by Southeast Asian consumers when watching Lazada live (LazLive) increased by up to 40 times.

The order volume of Chinese women's cross-border sellers increased by 182 percent compared with this year's promotion on September 9, and the order volume of Chinese cross-border makeup sellers on Lazada Malaysia rose by 500 percent compared with the promotion on September 9.

According to Denise Luo, head of LazGlobal with Lazada Group, Double 11 is the annual shopping carnival most anticipated by Southeast Asian consumers, and it is also a peak growth season for Chinese merchants who are interested in going overseas to Southeast Asia.