Singles’ Day Strategy Evolves to Focus on Customer Loyalty for Quality Growth
For consumer brands doing business in China, no date on the retail calendar carries more weight than November 11, also known as Singles’ Day. Singles’ Day has grown exponentially since Alibaba Group introduced it in 2009. Supported by the online retail giant’s sophisticated consumer experiences, Singles’ Day has become the world’s biggest annual shopping event, with sales outperforming Black Friday and Cyber Monday combined. Today, the event is the pinnacle of the global retail calendar, with over 290,000 brands offering 17 million products to over 1 billion annual active consumers across Alibaba’s ecosystem this year.
Amid global uncertainties and consumers’ priorities shifting toward quality and experiences, merchants and platforms must rethink their Singles’ Day strategy. Is the ultimate success metric the number of GMVs garnered in the sales period that can be potentially costly and drive pent-up demand for the short term, or is it building sustainable engagement for their businesses for the years to come? The shift toward more sustainable success metrics lends another lesson for traditionally discount-driven shopping holidays like Black Friday and Cyber Monday. Shopping holidays should not only be a race to the bottom for merchants.
Better Quality, Better Differentiation
Leading brands are taking note. The most recent Singles’ Day underscored the elevation of brands’ China strategies from promotional campaign investments to long-term customer retention. Brands are reinventing Singles’ Day as an occasion to build audience loyalty, reflecting their customers’ changing values with preferences for customer experience (CX) and product quality over prices.
The loyalty-driven model demonstrated its strength in China’s pet product industry. Royal Canin, a leading pet food provider, effectively recruited and engaged with members in the Alibaba ecosystem using techniques that included scenario profiling, rich educational content, and benefits specifically aimed at new members, such as free medical checkups for pets. The efforts have yielded record customer engagement. Member enrollment volume on Tmall increased by over 10% compared to the previous cycle, nearly 20 times the industry benchmark. First-time purchases by members increased by 20%. With almost 1.6 million members in its Tmall flagship store, Royal Canin has secured a growth driver for its long-term development.
The Power of the Most Loyal Cohorts
For sustainable growth and long-term profitability, brands leverage Alibaba’s e-commerce platforms to create unique experiences for their loyal customers, including premium customer loyalty and membership programs, seamless customer experience across channels, and engaging content.
More than 40 brands have seen their membership base grow to more than 10 million after launching on Tmall, such as Nike, which rewards its premium customers with shopping points and engages them with interactive games that use the customers’ 3D avatars.
Alibaba’s loyal consumer base with high spending power is a target-rich environment for brands’ loyalty programs to tap into. In the 12 months ending in September 2022, more than 124 million active Chinese consumers spent close to US$1,400 per capita on Taobao and Tmall, Alibaba’s twin retail platforms. The retention rate of these consumers in the Alibaba ecosystem is 98%. Consumers increase their engagement over time as well. Over a five-year time frame, an active consumer will typically make purchases from more product categories the longer they are with Alibaba, from seven product categories to 19 product categories. And as of June 2022, the 25 million-plus members of 88VIP, Alibaba’s growing premium loyalty program, spent at least US$7,800 per capita annually. More than 98% of 88VIP members made purchases during Singles’ Day this year, with a growing contribution to the total GMV.
Livestreaming, Immersive Shopping Experience and Novel Products
Brands are using livestreaming to reach their customer base. More than 300 million consumers have watched livestreaming on Taobao Live since the start of the Singles’ Day presale period. Brands like skin-care firm Jala Group used livestreaming to drive its membership loyalty programs, which helped improve customer engagement and reach customers with greater precision, and which can translate to higher repurchase rates.
XR Laboratory, a research lab Alibaba established to develop augmented reality (AR) and virtual reality (VR) applications, supports immersive Singles’ Day VR experiences for such brands as Nintendo, Underverse, and Blizzard Entertainment with thousands of templates for content creation, shopping coupons and discount codes, free traffic and search engine optimization (SEO) support, and favorable finance terms.
Singles’ Day has redefined shopping festivals to drive both short-term sales and long-term quality growth for merchants and brands. It will continue to serve as an innovation testbed for sustainable growth and an inspiration for Western discount-driven festivals.
Learn more about how Alibaba helps brands succeed in the world’s largest retail event.
