The annual Singles Day online shopping extravaganza led by China’s Alibaba is the world’s biggest ecommerce event, with sales last year exceeding $30 billion. Video livestreaming will play a bigger role this year, and such foreign brands as Estée Lauder already are getting in on the act.

Franklin Chu, managing director, Azoya USA

Franklin Chu, managing director, Azoya International

It’s the biggest retail event on the planet. Singles Day is an annual sales event created by China’s ecommerce powerhouse Alibaba, and last year it generated US$30.8 billion in gross merchandise value (GMV).

Singles Day takes place every year on Nov. 11. Yet experts say this year requires a new approach, as sales growth is slowing down. Last year sales growth slowed to 27%, down from 39% in the previous year.

Taobao livestreaming generated over US$15.1 billion in gross merchandise value, up nearly fourfold from the previous year.

We take a look at what Alibaba is doing to counter slowing growth and what these trends mean for American retailers and brands selling online to China.

Brands are Running Influencer Livestreaming Campaigns to Generate Demand

Video livestreaming on Chinese ecommerce site Taobao has existed for a few years, but only this year has it become a major focus for Alibaba on Singles Day. Last year, Taobao livestreaming generated over US$15.1 billion in gross merchandise value, up nearly fourfold from the previous year.

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How does it work? During these QVC-like livestreaming sessions, young hosts and influencers demonstrate products in real time, highlighting the pros and cons of each product. The value-add is that viewers can get a better sense of what the products look like when used by a real person.

Taobao’s livestreaming page displays live shows hosted by Chinese influencers.

What’s more, viewers can use messaging systems to ask questions in real time, such as how does the fabric on a piece of clothing feel or how does it look when paired with a red-colored skirt. The interactive nature of these livestreaming sessions usually leads to higher user engagement and conversion rates. In fact, Taobao boasts that livestreaming conversion rates average around 32%.

Estée Lauder is doubling down on livestreaming this year. As early as Oct. 23, Estée Lauder has been hosting daily influencer livestreaming campaigns that direct viewers to its Taobao/Tmall pages. Viewers can put down pre-sale deposits for limited-quantity items that they can then purchase on Singles Day.

Estée Lauder’s livestreaming campaign on Taobao. Source: Official Taobao Mobile App

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The video above shows that over 34,000 users viewed this streaming session in the morning of Oct. 23. Users who put down a 50 RMB (US$7) deposit were eligible for this set of lotion and toner products from Estée Lauder, as well as other valuable items.

Tik Tok Videos and Singles Day 2019

Another feature to look out for this year is livestreaming’s cousin: short-form videos.

Towards the end of last year, short-form video platform Tik Tok, better known as Douyin in China, began testing ecommerce functions on its platform. Short videos on Tik Tok drove over 200 million RMB (US$28 million) in sales for various Taobao merchants.

A select few influencers could link their videos to items and promotions on Taobao stores. Once users clicked on the link, they were taken to an interstitial screen that showed a preview of the product (but still within the Tik Tok app). After they clicked in, they were taken to the full Taobao page where they could make purchases.

The whole process is seamless and requires just a few taps of the finger. For promotions leading up to big holidays such as Singles Day, brands usually engineer pre-sale campaigns, in which short videos lead users to landing pages, and induce them to put down pre-sale deposits for items to be purchased on the big day.

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A typical user journey on Tik Tok. Source: Official Tik Tok/Douyin Mobile App

This year’s hashtag campaign from Oct. 21 to Nov. 11 focuses on driving traffic to campaigns for certain brands or products, including New Zealand’s geo-skincare brand and South Korea’s amortals brand.

In the example above, an influencer with one million followers drives traffic to Alibaba’s Taobao promotion page on Tik Tok. This page is full of coupons that can only be redeemed on Singles Day.

These types of campaigns enable brands to reach different types of users through different types of influencers—each influencer has his or her own specific fan base. Holding such campaigns earlier on also enables brands to lock in these customers and drive traffic for the final day on Nov. 11.

Alipay is the Gateway to Chinese Internet Users on Singles Day

Alibaba’s mobile and online payment platform Alipay is also holding its own campaigns to get customers excited for Singles Day this year. It is doling out 2 billion RMB (US$283 million) worth of virtual cash to those who download the newest version of Alipay.

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Alipay also gives users a chance to win up to 99 RMB (US$14) in cash, and it is also offering users a chance to win up to 88 RMB (US$12.50) in bus and subway coupons.

Why does Alipay play such an important role on Singles Day?

Alipay is oftentimes the first point of contact between new internet users and Alibaba’s ecosystem. While Alipay is already commonly used in China, there are still pockets of older users that aren’t as tech-savvy and also new, younger users coming online for the first time every year.

Since Alipay is a payments app with no upfront fees and a relatively high frequency use rate, customers are likely to open the app on a daily basis.

Alipay’s Home Screen. Source: Official Alipay Mobile App

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Alipay is also powerful as a “super-app“ that contains all of Alibaba’s products and services. Once users are inside the app, Alipay can upsell them on other products in Alibaba’s ecosystem, such as ecommerce products on Tmall/Taobao, Youku video memberships, Eleme on-demand food delivery services, etc.

With Alipay, Alibaba can also analyze customers’ purchasing data and figure out how to better market its products to customers. Thus, not only does Alipay play a crucial role as an entry point for new internet users, but it also enables merchants to better understand and target existing customers.

Key Takeaways

  1. Livestreaming + ecommerce will play a bigger role in Singles Day 2019. Livestreaming enables viewers to interact more closely with brands and activates viewers’ purchasing intent.
  2. Taobao is running short video hashtag campaigns on Tik Tok. Brands are working with a number of influencers to drive traffic to promotions on the platform. Customers can apply coupons of up to 100 RMB (US$14) off of products on Singles Day.
  3. Alipay is running its own promotions, planning to dole out 50 million RMB (US$7 million) worth of virtual cash to users who download its newest version. Alipay users also can enter into raffle contests for coupons that can only be applied on Singles Day.

Azoya assists retailers and brands as they expand into China via ecommerce.

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