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Digitalization in China - What’s not to miss for e-commerce campaigns and promotions in China?

Chinese e-commerce is defined by numerous campaigns. They are a key element for a successful flagship store and several unique promotion tools can be applied.

Which campaigns are the most relevant?

In China, when it comes to e-commerce business, online campaigns are significantly important to boost brand awareness, traffic and conversion rate. Comparatively, these campaigns are similar to Amazon’s Black Friday or Cyber Monday, the only difference is that they are much more on a larger scale. Every month there are plenty of smaller and bigger campaigns that have a variety of influences depending on factors like brand popularity and its compatibility with the campaign’s topic.

Some of the most important campaigns in China are:
- Chinese New Year
- Women’s Day
- 618 Shopping Carnival
- Double 11
- Double 12

The campaign that is best known worldwide is the Single’s Day or Double 11 campaign, originated in the dormitory of Nanjing University by four single students who chose the date of 11th of November to celebrate their single life together, given the fact that the number 11.11, consisting of four "1"s, metaphorically represents four singles' lives. Today the concept has spread globally and is massively celebrated by Alibaba with a live-streamed gala featuring stars like Taylor Swift and Mariah Carey. Nowadays, it is an event celebrated by everyone in China and its neighbouring countries and is massively pushed by all e-commerce platforms as the largest shopping event of the year.

In 2019 Alibaba generated a gross merchandise volume (GMV) of 38.4 billion U.S. dollars coming from 1.3 billion orders. More than 299 brands reached a GMV of more than 100 million RMB (approx. 14.1 million USD). Alibaba itself generated 55.9% of the campaign’s nation-wide GMV. While JD.com is in 2nd place with 16.7% from the total GMV. A compounded annual growth rate of 61.7% of Alibaba’s GMV proves the campaign’s growing relevance for shoppers and sellers. For both, the bigger and smaller campaigns generally consist of different phases. In order to understand their importance, it is necessary to know that the number of promoted products is limited in their availability during the promotion time. Furthermore, the customers’ chances to purchase depend on the attractiveness of the discount. Naturally, the more attractive the deal is, the more attention it will receive.

In the pre-sales phase, customers are able to buy products for an already reduced price. This offer is relevant for customers that are already familiar with the products and know what they are buying, most likely they are already aware of the difference between the campaign price and the non-campaign price. Whilst for the pre-warm phase, customers can add a product into their basket beforehand to have a higher chance to get to buy the product they are aiming for. The official or main campaign usually starts at midnight with a lot of attractive deals. It consists of a pre-campaign phase with different waves to reach the goals of platforms and store operators.

Then what are the promotion methods?

Surely, on top of generally reduced sales prices during the promotion event, there are plenty of ways to offer discounts to customers. The availability of promotion types depends on the campaign and the e-commerce-platform itself. For instance, the Red Envelope culture, as a part of old Chinese tradition, dated back to the Qin Dynasty, where the red envelopes as gifts were normally distributed during certain events such as Chinese New Year, weddings as well as birthdays, and the envelopes are normally given from the older to the younger generations. As this tradition is very significant in China, somehow it manages to adapt its way into the digital world.

China’s most famous messenger app WeChat, for example, is enabling its users to send red envelopes between contacts and each other. Moreover, brands and stores are also using this function to push promotions by sharing red envelopes as a rebate to their customers and motivate them to shop more often.

Alternatively, another way to offer discounts is by offering bundled products. Next to the classic marketing of ‘buy one, get one’, most often brands are also using methods such as ‘buy two, get one’ or ‘buy one, get 50% of the second purchase’, and so on. During campaigns, products are not only promoted by price-off promotions but also by creating special product offers. Some brands even create limited product editions or gift boxes to attract more customers. Other brands often offer additional gifts if a certain number of products has been bought or when a basket value has been reached. It is fair to say that free shipping and free taxes are basically mandatory during campaigns and, although they have to be applied, are no tool to let a store or brand stand out.

Besides the already mentioned promotion tools, that are happening at the store on a product level, are quite straightforward and can be directly detected by the shoppers. Nevertheless, paid marketing tools such as keyword bidding and content marketing in the forms of live streaming or posts on social media are also important tools to drive sales. Last but not least, in order to reach the defined campaign goals to increase brand awareness and profitability, the planning of the campaign needs to start much earlier. There are multiple things to consider for pre-campaign preparation, including KOLs booking, product images and design arrangements as well as live streaming scheduling. Therefore, perfected pre-campaign planning is crucial to seize the opportunity and achieve the defined goals.

Sources:
https://www.statista.com/statistics/880212/sales-share-of-the-leading-e-commerce-retailers-in-china/
https://www.statista.com/statistics/364543/alibaba-singles-day-1111-gmv/
https://www.statista.com/statistics/364780/number-of-orders-alibaba-singles-day/

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