As a key leader in social commerce, Chinese retailers have pioneered many innovations globally, including live streaming, short-form video and in-app shopping options. However, social and digital firms outside of the e-commerce sector, such as ByteDance and WeChat, are also squeezing into the game, making the landscape more complicated and competitive.
It has become essential for brands, especially Western brands that are new to the Chinese market, to really harness the synergy of the social commerce trend, in order to leap forward and stand out. With Double 11, otherwise known as Singles’ Day, right around the corner, the 2021 shopping season in China is about to kick off. So, how can brands leverage social commerce to maximise their sales in China for this major shopping day?
What is Double 11 or Singles’ Day?
Double 11, or Singels’ Day, is a widely celebrated unofficial holiday in China. This day is designated to celebrate those who are not in romantic relationships. It has also become one of the most popular physical and online shopping days in the world, with 2020’s overall gross merchandising value amounting to over ¥900 billion – a new record for this major shopping event. Double 11 has become a great sales opportunity for brands to drive revenue and reach new audiences in the APAC market.
Social as a new sales channel
Over the last few years, social commerce has proven its success and popularity through booming market share. According to Statista, the market size of the social commerce sector in China reached approximately ¥2.3 trillion in 2020, which accounted for 78% of the global social commerce revenue. Based on the upward growing trend of this channel, eMarketer predicted that the number of social buyers in China will increase to 446.8 million by 2023, which is roughly 30% of the overall population.
Why did social commerce spring up so quickly as a new sales channel over the past few years? While there may be a handful of reasons behind the rise of social commerce, we are going to explore three key driving forces that have accelerated its growth: inflated new customer acquisition costs (CACs), mature technology and a generational shift.
Customer acquisition costs
With the online shopping landscape becoming increasingly saturated after years of high-speed growth, the stiffening competition has pushed the CACs on mainstream Chinese e-commerce platforms through the roof. As of the first quarter of 2020, Alibaba’s average CACs plateaued at around ¥812, whereas social e-commerce platform, Pinduoduo, acquired each new customer at ¥170 on average. It does not come as a surprise that brands are venturing into the social realm to garner more traffic at a cheaper cost.
Social commerce would have not have evolved as quickly as it did without the ongoing advancements in technology, especially with smartphones and 4G/5G telecoms serving as the main infrastructure behind digital growth. As internet bandwidth increased and price rates decreased, the trends in media consumption have shifted from text and images to videos and streaming. This ultimately laid the foundation for short-form video platforms, live streaming shopping and other engaging technologies, such as virtual reality and augmented reality.
Another underlying force that has fueled this social commerce trend is the generational shift in digital users and shoppers. Social commerce has proven to be an enticing channel to Gen Zers, the first generation of “digital natives”, with the prevalent but fragmented touchpoints along their purchase journey providing them with ample opportunities to shop. According to research conducted by BCG and Tencent, Chinese consumers are exposed to approximately 12 touchpoints or more throughout their purchase journey. Particularly during the discovery and research phases, brands usually implement four to five touchpoints which are all highly digitalised.
Understanding the driving forces behind this trend can enable brands to select the most suitable channels for their business goals and make the most out of the testing period for this shopping season.
How to leverage social commerce for Double 11
Double 11 sales campaigns have been infamous for their complicated discount rules and prolonged time range, for both buyers and brand operators alike. If you plan to cover the whole campaign through only one platform or by using a singular strategy, you may miss the opportunity to maximise traffic. This will make it easy to get lost in the multiple phases of sales. Below is a step-by-step guide to leveraging social commerce for this once-a-year razzmatazz.
In general, we can divide the month-long campaign into five phases. However, brands should also focus on different channels and relevant communication messages accordingly. Below, we use the Alibaba Taobao Double 11 campaign timeline as an example.
This stage is when brands ramp up their brand awareness and product seedings through social networks and user-generated content platforms, such as RED or Weibo, to garner bigger pools of potential customers. This phase usually starts from early September and lasts until the launch of the first wave of pre-sales.
However, platforms like RED and Weibo, usually cannot insert landing pages directly from mainstream e-commerce platforms, due to their own policies. Although these platforms also provide their own propriety e-commerce functions, many brands may not leverage these platforms to set up stores due to their limited resources or concerns around function maturation.
First wave of pre-sales:
The first wave of pre-sales signals the official commencement of the Double 11 campaign. Similar to last year, this year’s first wave of pre-sales began on 20th October. However, the specific kick-off time on the day of, shifted from midnight to 20:00, meaning there’s no need to stay up late to place the pre-order deposits anymore!
In this phase, brands should focus on promoting discounts and hero products on semi e-commerce platforms, such as Douyin and WeChat. Many brands have set up their official storefronts on those platforms (WeChat mini-program store or Douyin store), which are also less limited in directing traffic to mainstream e-commerce marketplaces. At this stage, brands are also recommended to tap into the power of live streaming events. It is always essential to book your favorite live streamer as early as possible to ensure their availability.
First wave of sales
This stage will begin sometime between 1st November at 3:00 to 3rd November at 23:59, during which the customer can pay for the product balance. During this period of time, brands need to emphasize a clear call-to-action, to encourage customers to complete their orders as soon as possible. It is also worth experimenting with the content features on those e-commerce platforms to maximise the products’ exposure to customers when they are lingering on those online marketplaces.
Second wave of pre-sales
This second wave of pre-sales, which begins on 4th November and lasts until 10th November, is definitely the most important stage before the final sprint. Retailers usually leverage all of their available channels to maximise their brand’s presence and ultimately, drive sales. At this phase, brands will typically invite the most well-known influencers that they can afford to work with, to a streaming event hosted on an e-commerce platform. These events are usually further amplified through other social channels. Undoubtedly, all of these efforts aim for a new record of final sales.
Double 11 sales
As the climax of the shopping festival, this phase occurs on 11th November, from 00:30 to 23:59. The traffic towards mainstream e-commerce marketplaces typically skyrocket on this day, and it is the final chance for brands to capture sales opportunities before the campaign ends. Therefore, it is important for brands to include their final call-to-action across all available channels.
Above is just a general guide, which can be customised according to your brand’s goals, resources and requirements. Even if there are preferential channels at each stage, it is still advised that you choose one of your official social platforms, such as WeChat official account or Weibo account, as your main promotion information hub. Here you can publish and consolidate all of your discounts and product updates for customers to easily follow.
For more on driving growth on Double 11, or Singles’ Day, check out our most recent blog! If you still feel uncertain on how to navigate through this shopping festival, please feel free to contact us for more guidance or a free consultation.