Consumer behavior varies from ordinary days to Double 11 and likelihood to shop at cross-border platforms expect to go up this year
Shanghai (November 9, 2018) – Domestic E-commerce platforms will remain the most popular shopping channel during this year’s Double 11 sale, while likelihood to shop at brand websites and cross-border platforms expect to go up this year, according to AlixPartners “China Double 11 Sale Survey”.
As the Double 11 shopping festival approaches, the leading consulting firm AlixPartners polled more than 2,000 adult Chinese consumers online who intend to participate in this year’s Double 11 sale across all regions, demographics, and income levels. The survey aims to understand how E-commerce is changing the retail landscape in China, Single’s day growth and impact of new retail and technologies.
Growing popularity of cross-border E-commerce and foreign brands
AlixPartners expects that likelihood to shop at cross-border platforms to go up this year, with 41% consumers surveyed responded that they are more likely to shop at cross-border platforms in this year’s Double 11 compared with last year and 45% responded to remain shopping at those platforms. Apparel, footwear and sporting goods are the top categories purchased during Double 11 sale, followed by food, consumer packaged goods and beauty products. Consumers place majority (over 60%) of their shopping during Double 11 to local brands, but they expect to slightly increase foreign brands purchase this year (from 27% to 29%).
“The favorite shopping categories during the Double 11 in China are very different from our hypothesis and from other countries. For example, people would purchase home appliances and consumer electronics, those are relatively expensive and less frequently renewed during Black Friday in the U.S.,” Michael McCool, Managing Director of AlixPartners in Hong Kong says. “The growing favor for cross-border E-commerce and foreign brands goes along with simplified customs clearance procedures, lower imported taxes and increasing number of brands entered and investing in the China market.”
Preference for established brands over small retailers
83% consumers intend to purchase on Tmall, 73% on Taobao and 65% on JD in this year’s Double 11, according to the survey. These platforms are also their top three choices in the last 12 months and in last year’s Double 11. But data has shown a significant gap between shopping on Taobao on ordinary days (87%) and during the Double 11 (73%). “This indicates a preference for established brands over small retailers during the shopping festival and further suggests that big names are able to undertake bigger discount than small businesses and individual entrepreneurs,” says Mr. McCool.
In addition, brand e-commerce sites are becoming a popular channel among Chinese consumers-- 43% surveyed consumers claiming they are more likely to shop at brand sites in this year’s Double 11 compared with last year’s.
Marketing campaigns cannot combat discount
According to the survey, 75% plan to spend over 1,000 yuan during this year’s Double 11 shopping. There is also a significant increase in the range of spending over 5,000 yuan, from 14% last year to 31% this year. While brands want to have a finger in the pie during the peak sales period and launch various marketing campaigns to catch the eyeball, overall value, level of discount and brand perception are considered the most important shopping criteria, and product packaging and games are at the bottom of their care-about. Mark down is the most preferred discount form, followed by coupons and rebates; freebies and product sets are the least preferred discount forms chosen in the survey.
Consumers are clear-minded when spending their money to celebrate the shopping festival, they tend to make careful shopping decisions as usual, if not more careful. The study shows that nearly 60% plan to conduct pre-purchase online research on the majority of their Double 11 spending this year; only 3% said that they won’t do any online research at all. More surprisingly, 80% consumers hold off spending specifically for Double 11, and more than half of them hold off for 3 months or even longer.
Smart usage of new retail activities
In order to boost sales, promoting campaigns placed at the right time and in the right channel based on the understanding consumers’ preference are the key. Some companies started to build up the momentum months ahead of Double 11. However, the early bird doesn’t necessarily catch the worm. AlixPartners’ survey shows that more than 70% put in most of their orders/pre-orders for purchase on Single’s Day itself or only 1 to 5 days in advance. Targeted coupons and in-platform banner ads are often considered the most preferred channels for deal searching; the traditional SMS messages and email blast are voted as the least effective channels.
Brands that are good at deploying new retail activities and online-offline integrations are engaging the consumers in a variety of ways. Activities including offline scanning code and red envelope for online shopping, and online purchase offline pickup/offline purchase delivery to home etc. are seen as optimizing the shopping experience for consumers during Double 11.
The survey also indicates other shopping festivals for brands to launch the charm--Double 12, Spring Festival and 618 (June 18) top the rank.
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.
Crystal Leung, AlixPartners
+852 2236 3512
Agnes Zhao, Finsbury
+86 10 5816 2688
Tong Li, Finsbury
+86 10 5816 2691