11.11 strategy: how to avoid heavy losses and create opportunities Articles in English / In the Air

In the aftermath of 2016’s 11.11 we see Alibaba achieving a result as high as RMB 120.7 billion GMV in just 24 hours, an astonishing 32% increase compared to the RMB 91.2 billion from 2015. This is an impressive (albeit not unexpected) result that reaffirms Alibaba as the ruler of the ecommerce landscape in China. But if we take a closer look at the single players participating in this online shopping bonanza, what is the implication for brands to be compelled to offer absurd discounts on their merchandise for one day?

First of all, we are not talking about just one day. At first glance 11.11 might look like a lifetime chance within a 24 hours window, but over the years it has evolved far beyond a 1-day sales event. The excitement actually starts long before November: we saw how consumers since mid October started exploring flagship stores on Tmall and Taobao, they engaged with branded games, joined preheating campaigns and watched videos; they also advocated their favorite brands on social media, shared news and recommended products to friends.

 

Strategy to avoid heavy losses and create opportunities

Besides the usual business opportunities that 11.11 represents for brands (boost on sales and volume, clear up unsold merchandise), it can also cause heavy losses or insufficient return of investment because of the important entry costs for small and middle brands (8K€), commission fees for some product categories (around 5% for fashion or beauty) and marketing costs. Thanks to big exposure opportunities that this event creates, Brands should amplify their sales strategy to include branding and communication initiatives strategically adapted to 11.11.

Here are a few sales and marketing strategic tips to counterbalance the almost inevitable losses coming from all the discounts.

  1. Maintain the pressure: a few weeks before the event consumers start to search all the e-marketplaces looking for the best deals and add the first items to the cart. The increased exposure for all brands creates the necessity to stand out from the competition with a communication strategy that not only focuses on the item on sales but also keeps expectations high among consumers until the final date.
  2. Personalize your communication: In order to win your consumers and redirect as much traffic as possible to the promotion page, it is even more important than usual to adapt communication in both acquisition and engagement stage of the campaign. Thanks to data collected on consumer behavior it is possible to personalize content on external platforms (e.g. live streaming) and in the brand’s promotion page to create more relevant and fun engagement.
  3. Involve your offline store: 11.11 is not necessarily all about online strategy. Chinese consumers are notoriously flexible in their journey and willing to meet brands on both online and offline touch points. A good 11.11 strategy also involves offline stores (O2O) in order to create a more dynamic promotion campaign that supports the traffic generated by offline venues that otherwise would be completely cannibalized by online operations.
  4. Propose a dedicated range of products: Brands add value to their offer by raising expectations over a bundle of existing products, a special edition packaging or a new product launch that will be released exclusively on November 11. The mobile phone brand Honor (a Huawei company) managed to be the 4th most performing brand this year also thanks to the launch of new phone models that became available starting from this year’s Double 11. Another example is Sephora that, besides carefully selecting the products available on the platform, also released some limited edition product bundles specifically for 11.11 and heavily communicated on them.
  5. Do not play with the price: Increase the original price of products on discount is NOT a winning strategy. Besides the obvious unethical matters, Chinese consumers are really keen in finding out these tricks, also due to the recent media buzz regarding this scam.
  6. Test and learn: an attentive analysis on previous years performances, along with data acquisition from competition and industry insight are necessary to better design the winning strategy. Test it, and improve it next time.

 

 

Insights from the best performing brand this year: Suning

Suning mainly focuses on consumer electronics, household commodities, cosmetics and baby care products. Before setting up a store on Tmall August 2015, Suning mainly operated through its offline stores and brand ecommerce. Following an average performance on 2015.11.11, this year Suning excelled with an outstanding O2O campaign to support the sales event and get to top step of the podium.

Massive advertisement investments: TV commercials and outdoor ads have been heavily used by the brand to communicate their attendance to 11.11.

Offline event: Suning built an ancient Chinese marketplace in Nanjing and organized several offline events to lead an unprecedented O2O shopping experience. Consumers could visit the venue and stroll through the market stalls and purchase from the brand, join different offline games and win additional discounts. This venue can also be visited online through VR experience.

KOL on live streaming: on November 8th (3 days before the event), Suning gathered 111 KOLs to advocate the brand on social media through live streaming. Celebrities and brand leaders endorsed and recommended specific categories and brands in Suning’s selection of products on sales.

These are only a few examples of strategies that your brand can implement during 11.11 next year, or any other major sales events.

Equancy Shanghai is positioned as a reliable & efficient business partner in China to grow Asian activities of global companies. Equancy Shanghai helps global companies take on their toughest business challenge like adapting their business to the local specificities of the Asian markets and consumers, seizing innovative and daring opportunities to ensure profitable and long-term growth.


Avatar de Omar Paccagnella
Omar Paccagnella

With a Master's Degree in Chinese Business from The University of Leeds, in addition to his education and past experience in China, Omar owns a valuable insight into the Chinese culture and business environment gained through his studies as well as working experience in Hong Kong and Shanghai.

Avatar de Pierre Gomeriel
Pierre Gomeriel

Après un Master 2 en économie du numérique et entrepreneuriat à Rennes 1/Télécom Bretagne Pierre rejoint Equancy en 2013 pour des missions d’acquisition, de suivi de la performance et de maîtrise des aspects techniques et opérationnels des projets (plan de marquage, implémentation et test de tags) pour Nissan Middle East, Amundi, Michelin ou Disneyland Paris. Pierre est certifié sur les principales solutions de mesure d’audience et de gestion des tags.

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