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35 Billion Euro Revenue on Singles’ Day. How Alibaba is crushing eCommerce in China

Galas, live shows and live streamers lie at the heart of "Retailtainment"

It happened just this past Monday while you were sleeping: The world’s biggest shopping event, Singles’ Day, was the catalyst for Chinese eCommerce behemoth, Alibaba, to turn over nearly EUR 35 Billion in just 24 hours. Alibaba was ready for its record day with a countdown gala in Beijing featuring global stars, famous Chinese live streamers and Taylor Swift all performing. In doing so, Alibaba has become synonymous with the latest eCommerce trend in China “Retailtainment.” Today, OMR breaks down how China has meshed eCommerce-company shopping with entertainment.

It was the biggest digital extravaganza on the planet: Singles’ Day, the biggest day of deals for China’s largest eCommerce company Alibaba. Every November 11, a reported 500 million Chinese consumers duke it out in a fit of shopping mania for the best deals on products from around the world. The figures generated on this day are enough to make most Western merchants’ and marketplace operators’ heads spin: In the very first minute alone, Alibaba said its own marketplace generated 1 billion in sales. A live ticker by the South China Morning Post (which is owned by Alibaba) keeps track of the current “gross merchandise volume”. Shortly after midnight, the ticker grinds to a halt: USD 37.4 billion—or nearly EUR 35 billion.

Get in the shopping groove with Taylor Swift

Rewind to weeks before Singles’ Day kicked off. Chinese consumers have marked November 11 in their calendars and are putting in the work: comparing prices, calculating big purchases with bulk discounts and planning what to do with them, while also losing their minds over artificial product shortages and saving their favorites in their shopping carts. Alarms were set across the country; the starting gun fired as it does every year at midnight in Beijing on 11/11. If you snooze, you lose has never felt more literal. Late risers were met with sold-out shops. Night owls were rewarded with an all-night “Countdown Gala” on Alibaba’s streaming platform Youku leading up to the start of Singles’ Day. Streamed live from Shanghai’s Mercedes Benz Arena, the gala featured numerous live appearances from K-Pop superstars, famous Chinese live streamers and Taylor Swift. If it entertains, it plays. It certainly does not seem far-fetched to think that the gala production alone had to have cost somewhere in the 8-figure range.

Given that the Chinese eCommerce market in 2019 and its EUR 640 billion in revenue is larger than all eCommerce markets in North America and Europe combined, Singles’ Day is the world’s biggest deal day. Alibaba generated EUR 27 billion during the 24-hour Singles’ Day last year across its three platforms Taobao, TMall and its crossborder platform TMall Global. To put that into context, the biggest shopping day in the USA, Cyber Monday, generated EUR 7 billion in 2018 and the entirety of eCommerce revenue generated in our home market of Germany in 2018 was EUR 64 billion.

16 shopping events have a snowball effect on discount battles

Singles’ Day was first celebrated in 1993 by single students at the University of Nanjing, who saw themselves in the four “1s” of November 11 and began giving each other small gifts. In 2009, Alibaba manager Daniel Zhang co-opted the student party while looking for an unadulterated holiday for young people and repurposed it for Alibaba’s first major discount special. The move was so successful, along with many others, that Zhang was tapped to replace Jack Ma as CEO of Alibaba.

Singles’ Day is the largest of numerous shopping day events in China. Competitor JD.com, for example, has 6.18 on June 18 (the day the company was founded), which, according to company figures, also generated EUR 27 billion in 2019 in revenue. The hyper-competitive industry sees competitors regularly lower their prices to match those of whichever event is on at the moment. eCommerce agency Azoya counts a total of 16 separate shopping events in China held on holidays such as the Chinese New Year’s, Christmas, Women’s Day and sales days on smaller platforms. In short, China’s eCommerce industry is heaven year-round for bargain hunters.

Singles’ Day. “A disaster for the planet”

Given that Chinese consumers remain very price-conscious, which decelerates growth in the Chinese eCommerce sector, we will probably see an increase of discount battle events in the future—which makes eCommerce an even more risky business of mini-margins for Chinese merchants. There is also a healthy amount of criticism directed at the world’s largest retail event by environmentalists: Greenpeace China calls it “a disaster for the planet”, as hundreds of tons of packaging waste is not recycled. Alibaba praised a “green 11.11 shopping festival” with improved recycling options and incentives for consumers to purchase eco-friendly products.

Chinese eCommerce companies, however, are not limiting their efforts of attracting consumers to discounts alone. Parties, shows and glamor are essential parts of the festivities and are designed to make a significant contribution to putting people in the shopping mood. Alibaba says its goal is to “blur the line between retail and entertainment “, according to a 2016 Forbes article. “Alibaba only vaguely resembles an eCommerce platform now, as it is more of an entertainment platform,” according to German Alibaba manager Christoph Isenbürger in 2018.

Cats, dogs and kangaroos get you in the shopping mood

Alibaba’s preferred term is “Entertainmerce;” the industrywide accepted term, however, is Retailtainment, which dates back to the late 90s and describes the strategy of transforming shopping in stores and malls into an experience. With the rise of eCommerce in China, Retailtainment has had an incredible renaissance. Online retailtainment in China includes primarily attractive discounts and engaging content marketing, while also focusing on the integration of deals in shopping malls and shops. It’s got to the point that now Chinese eCommerce platforms like Taobao and TMall are opening up their own supermarkets and shops.

JD mascot

To get a glimpse of how Chinese eCommerce companies are implementing retailtainment digitally, you just need to open up any Chinese shopping app. From the get-go, you see hordes of bouncing, jumping and skipping figures, the majority of which are cute and cuddly animals. The JD.com mascot is a cuddly dog, above whom a cute-looking logistics drone hovers. The mascot appears, nodding its head in approval, every time you scroll through the product offering or when you place an item in your shopping cart (a buy box in JD.com parlance.) Alibaba’s largest platform TMall is called “Heavenly Cat” (Tianmao) in Chinese and has a corresponding cat logo. The second-largest Alibaba platform is “uncover treasures” (Taobao), an apt name befitting the mother company. China’s biggest food-delivery service, Meituan Waimai, has a euphoric kangaroo racing across the screen on a scooter as its mascot. eCommerce apps push gamification to the extreme: There is a constant barrage of welcome vouchers and discount coupons in the form of gold bars, pulsating treasure chests bursting with cash, spinning wheels of fortune and red ribbons.

The megatrend of live-streaming influencers

Welcome voucher for new customers on JD.com

When asked why Chinese platforms seem to all employ some permutation of cute-and cuddly or fun-and-exciting in their UX design, one Chinese merchant said that with a shrug that they “want to appear young to their millennial and Gen Z target groups.” And one thing that is incredibly popular in this segment is group buying: Group Buying is an additional core component in every marketing plan in China. Entire platforms, like the listed Pinduoduo, live off of digitally organized mass purchases among friends. If you take a screenshot of a product in the TMall app, you are immediately prompted to share it with your friends. If you decide to, you can even decorate it further with a dozen different manga stickers along the lines of (“Do it!”), then you navigate further to your own WeChat, QQ or Weibo account.

The biggest trend at this year’s Singles’ Day is without a doubt live streaming. Originally a staple of gaming and written off repeatedly since 2016, digital teleshopping has undergone a revival in China over the past year. Alibaba, in the 11th year of Singles’ Day, is always on the lookout for new ways of promoting the event and has massively hyped up the trend. Round the clock across all of its platforms, prospective consumers can tune in to watch live streamers try out and try on products, primarily fashion articles. Users can interact with the live streamers by asking for product specs via the chat function, which the live streamers provide and demonstrate in real-time.

Austin Li – the sales genius with the dolled-up lips

The primary difference between the ladies hawking silk scarves and pearl necklaces on QVC in the late 90s is not really all that big. The new live-streaming stars are Gen Zers, who chat up their young shopping assistants, cuddle with small white furry dogs and stream their shows via their own mobile devices. This all gives the shows a charming improv feel. In 2019, Taobao said that it has generated EUR 61 million in sales revenue via its 4000 live-stream hosts alone—an increase of 430 percent compared to the previous year. The annual revenue generated by top live streamers has now eclipsed big brands.

Two examples: on October 10, live streamer Viya generated EUR 46 million in revenue on a single day and streamed last week with Kim Kardashian. Superstar Austin Li is rumored to have sold 15,000 lipsticks online in 15 minutes. The hype surrounding Austin Li has not died down at all in the past 2 years. The man with the curved lips tests luxury lipsticks on himself and has amassed a massive following of female fans. The manner in which he describes the lipsticks’ texture, pigmentation and hues and oftentimes criticizes without restraint is new and very entertaining. His clips regularly feature a friend, a small dog and a girlfriend, all of which combine to make it seem sitcom-esque.

200 employees test products—for a single influencer

Li was born in 1992 in the rural province of Hunan, he studied dance and sold L’Oreal cosmetics part-time, where he became a make-up expert. In 2017, he began live-streaming fulltime and since then has streamed on Taobao every night at 8PM right smack dab in the middle of primetime. For last year’s Singles’ Day he appeared in a promo video for Alibaba (at 1:31), where he takes part in a live sales challenge against Jack Ma, who was too embarrassed to put lipstick on and ended up losing.

While Austin Li may generate the highest amount of awareness, live streamer Viya produces the highest revenues on Taobao Live. Apparently her staff tries out all of the products before Viya plugs them, so that she does not risk the trust her followers have placed in her. And trust is an essential social currency in China, which is plagued by food safety scandals and counterfeits—having it is a determiner for success among influencers and live streamers.

Viya streams alongside Kim Kardashian

An additional factor in her success are her collabs with other famous influencers and live streamers, who appear in her shows and further boost the entertainment factor. The most famous of her co-hosts up to this point was the November 6th show with Kim Kardashian, who joined live from New York, where Viya pushed her “KKW Lips” line. It’s the latest example of Alibaba—collaborating with international celebrities on live-streams for Chinese audiences to retain the “retailtainment” factor in marketing.

It remains to be seen, however, if China’s retailtainment instruments translate to the Western eCommerce environment. There’s certainly no reason not to give it a try. Maybe every company should devise its own cute and cuddly mascot or groom a superstar sales celeb, who has the pull to lure people back to his or her Instagram account each night for the live-streamed show. There is certainly precedence for quirkiness to succeed in the West.

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