The impact of Covid-19, along with rapid demographic and lifestyle shifts in China, underpinned new consumer behavior and trends seen during this year’s 11.11 Global Shopping Festival, Alibaba Group Chairman and CEO Daniel Zhang said.
Speaking at a forum in Shanghai this week, Zhang said the annual shopping event – now in its 12th year – featured a number of key changes so that Alibaba could better serve brands and consumers. Originally a one-day festival, 11.11 was extended to 11 days this year. It wasn’t simply about pumping up sales. It was also about giving merchants and brands impacted by the pandemic a longer period to interact with and build up relationships with customers. It also took some of the pressure off of infrastructure, improving the experience for consumers, for example, by giving them more deals to pursue and ensuring orders for delivery weren’t all jammed into a single day.
The approach yielded strong results, with a record 250,000 brands and over 800 million consumers participating, and gross merchandise volume also at an all-time high of $74.1 billion.
“We wanted to explore a completely unique 11.11 by seeking change. On one hand, we needed to maximize the efficiency of resource allocation, while on the other hand, we wanted to be able to interact with consumers and to create better and more unforgettable experiences,” said Zhang.
Older consumers – those at the tail-end of the Baby Boomer generation and Gen-Xers – featured more prominently in this year’s event, their numbers spiking by 300% from last year. That older shoppers were coming online in greater numbers was noted earlier this year by Alibaba’s research arm, AliResearch, but it was largely pegged to necessity during Covid-related lockdowns that prevented them from going to wet markets or shopping in brick-and-mortar stores.
Now, around nine months later, large numbers of these older shoppers are still shopping online, this year’s 11.11 showed. With their sustainable savings, older shoppers in urban areas have even become bigger spenders than Millennials and Gen Z’s on apps in the Alibaba ecosystem, including Freshippo, the group’s New Retail-powered supermarket. And they’re active in ordering food delivery and are increasingly open to making bigger purchases online.
During this 11.11, some of the most popular categories among shoppers over age 50 were mobile phones, sofas and bathroom products. They tended to favor big-name brands in China and overseas, such as Apple, Haier and Midea.
Zhang noted that while the sharp rise of online shopping by older consumers does signify a lack of digital penetration before Covid-19, looking at 11.11 and beyond, he sees exciting new possibilities for future growth in this consumer segment. At the same time, though, looking at the behavior of younger shoppers and their interest in lifestyle upgrades is also an exciting prospect.
“When it comes to consumer demographics, what we are seeing this time is a bit like a dumb-bell, with the ‘1960s’ on one end, and the ‘2000s’ on the other,” said Zhang.
Already a force on Alibaba platforms, younger consumers are displaying increasingly strong demand for online entertainment, interactivity, new categories, brands and products.
And while women shoppers have tended to outnumber men in the younger demographics, male shoppers in their early 20s aggressively shopped for skincare and cosmetics for themselves through livestreaming this 11.11, part of China’s growing trend in male beauty. Their favorite buys included foundations, lip balms and brow pencils from overseas, said the company.
Digital-native brands that focused on direct-to-consumer engagements also logged record success during this 11.11. In fact, 357 emerging brands rose to the top in their respective subcategories over the 11-day event. One of them was Yuanqi Senlin, a Chinese beverage brand best known for its sugar-free sparkling drinks.
By leveraging Tmall’s extensive consumer insights, the brand quickly identified jasmine-flavored milk tea as a popular and unique taste that young consumers craved. The company further automated its online marketing, sales and distribution with the help of Alibaba. To launch this new product, it took advantage of the extended sales periods to livestream and allowed shoppers to pre-order the item. As a result, more than 200,000 boxes were sold in the first 30 seconds of 11.11, said the brand’s CEO Wu Jun.
By going fully digital, companies have more control over consumers’ overall brand experience and explore new direct-to-consumer opportunities traditionally offered through retail and wholesale distribution channels. For Yuanqi Senlin, test-launching its new product online meant lower go-to-market costs. Wu said they are now more confident about introducing this item to convenience stores and other brick-and-mortar partners in China.
“We recorded another successful 11.11 together with our consumers, merchants and partners globally. The key of this success is the acceleration of digitalization of businesses. We all recognize how the pandemic has been accelerating the digitization which now has become a necessity rather than an option,” said Zhang.
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