Are high-profile shopping events like 618 and Double 11 still the most effective way for brands to gain traction? Or is there a shift occurring? We explore the evolving trends.
Shopping festivals in China have seen a dramatic evolution. What began as single-day events have expanded into month-long celebrations featuring pre-events, elaborate galas, and a final burst of discounts and promotions.
Recently, however, a quieter shift has been taking place. Shopping holidays are increasingly focusing on more subdued, mindful consumption. In the past year, consumers have become more discerning, prioritising cost efficiency and high value at lower prices.
Despite the annual growth of these festivals, signs of a slowdown are evident. E-commerce giants such as Alibaba and JD.com have reduced their focus on gross merchandise value (GMV) reporting for major events like 618 and Double 11 since 2022. This slowdown highlights the need for brands to adjust their strategies in a more competitive and saturated market.
What Does This Mean for Shopping Festivals in China?
Although shopping festivals remain a key aspect of the Chinese e-commerce scene, brands must now approach them more strategically. Content and entertainment have become vital for product promotion, with short videos and live streaming taking centre stage. During last year’s Double 11, live streaming alone generated an estimated GMV of RMB 215.1 billion (over £233 million), reflecting a 20% increase from the previous year. Views of short videos on Taobao also surged by 113% during last year’s 618 festival.
Previously, participating in 618 and Double 11 was a given for many brands, but now, careful planning is necessary due to increased competition and shrinking profit margins. Partnering with key opinion leaders (KOLs) and live streamers during these peak periods often comes with high costs, while consumers expect substantial discounts, which further squeeze margins.
An emerging alternative is for brands to host their own live broadcasts, giving them greater control over content and messaging. By avoiding established live streamers, brands can better align broadcasts with their own identity. However, this approach might not be ideal for smaller brands just starting out, as they risk being overshadowed by larger competitors, leading to lower viewership and sales.
Newer brands might find more success by engaging in shopping holidays like Double 9 or Double 12, where they can gain visibility without the intense competition of 618 or Double 11. Other holidays, such as Qixi (Chinese Valentine’s Day) and International Women’s Day, offer opportunities for themed campaigns and emotional storytelling that can resonate with Chinese consumers.
Even when not participating directly, shopping holidays provide valuable insights into consumer sentiment and emerging trends. Brands can use this data to refine their strategies throughout the year.
The 618 Shopping Festival in 2024
Kicking off on 20 May and running until 20 June, the 618 shopping festival this year has started strong. Alibaba has made significant updates to its Taobao platform, simplifying the sales process and enabling easier store design for merchants. Additionally, Taobao and Tmall have eliminated the pre-sales model, which allowed users to secure products with deposits before campaigns began. This change aims to boost competitiveness and retain customers on their platforms.
Within the first four hours of the 618 event, over 59 brands on Taobao and Tmall had already met the RMB 100 million (£10.89 million) GMV target, and 376 products achieved over RMB 10 million (£1.09 million) in GMV each.
As we await the final sales figures for this year's 618 festival, it's clear that consumers are increasingly spreading their shopping throughout the year rather than concentrating it around major events. This shift may seem like a slowdown but could be seen as a normalisation. With the retail market stabilising and consumers less swayed by event hype, brands should focus on building recognition and loyalty year-round. Engaging content, loyalty programmes, and year-long campaigns can enhance brand value, while shopping holidays can serve as supplementary boosts.
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