How Can Luxury Brands Gain Ground On Singles’ Day Without Discounting?


Alexander Wei | November 10, 2020

Luxury brands wanting to dive into e-commerce in China can’t bypass Singles’ Day. Besides discounting – which tends to have a negative impact on brand value – what are some of the other digital strategies can brands deploy to capture consumer attention while achieving real growth during this shopping festival?

Alibaba is about to usher in the 12th edition of its annual Double Eleven (11.11) extravaganza. While it might have originated from a simple internet buzz phrase, Singles’ Day has since grown to become a shopping frenzy of unparalleled proportions in China, spanning both online and offline channels. Given the impact of the pandemic on Western markets this year, the focus on Singles’ Day is far more intense than it has ever been – with analysts and brand executives alike eagerly awaiting its performance data and statistics.

So far, Singles’ Day has been off to a strong start with livestreaming royalty Li Jiaqi and Viya kicking things off on 21 October – the day before pre-orders officially opened. That night alone, these two livestreaming sessions ended up generating over 7 billion RMB worth of gross merchandise value (GMV) – roughly the equivalent of Balenciaga’s annual revenue in 2019. Of this amount, over 1 billion RMB worth of down payments for pre-orders were made. And this is only the beginning.

Singles’ Day tends to be compared to Black Friday in the West – but this might be an overly simplistic observation. While the former is entirely focused on discounting, Singles’ Day also serves an important role in marketing by offering brands large amounts of exposure due to the amount of public attention focused on the festival, and the brand activations rolled out during the period. So much so that luxury brands wary of the impact of discounting on brand equity can also participate in the shopping extravaganza, especially given the alternatives to markdowns offered during Singles’ Day.

Redefining “Singles’ Day”

Back in 2009 when it was first launched, Singles’ Day was known as “Taobao Mall Sale Day” and had 27 participating brands offering discounts of up to 50 per cent and free delivery. That year, the festival raked in 52 million RMB within 24 hours.

With each iteration of the festival, tactics, product categories and even its duration has been continuously evolving. This year’s Singles’ Day boasts the participation of over 250,000 brands, 5 million merchandisers (Taobao stores), and an estimated 800 million shoppers, according to Tmall President Jiang Fan. In a departure from the format of previous years, this year’s edition has also been broken down into two phases, transforming it from a 24-hour shopping affair to a month-long one. In addition, Tmall Car and Tmall Haofang (Tmall’s online real estate platform) will also be taking part in this event for the first time, challenging the boundaries of e-commerce across consumer categories.

Whether as a result of the pandemic or an overall shift in consumer behaviours, the significance of e-commerce for luxury goods in this market is evident. According to the 2020 Digital Luxury Report jointly released by Boston Consulting Group and Tencent Marketing Insights, online channels accounted for a third of the total luxury market share from April to September this year – a marked increase from last year’s 12 per cent. Of this, 16 per cent has been attributed to brand-owned channels, and 9 per cent to Tmall and

Over 200 luxury fashion, beauty, tech and even automobile brands will be participating in Singles’ Day this year on Luxury Pavilion (also known as Tmall Luxury) – a separate section on Tmall dedicated to luxury brands. Famously known as a walled garden within the Tmall ecosystem, Luxury Pavilion gives these brands an exclusive space to showcase their products and assets away from the frenzied promotions and discounts raging on the rest of the platform.

This year, Burberry released a limited edition scarf on the platform – it is the third year in a row that it has launched a platform exclusive for this event. Brands including IWC Schaffhausen, Breitling and Balenciaga also unveiled new products on Tmall. This is in contrast to the West, where brands rarely see sale events like Black Friday or Boxing Day as an opportunity to launch new products.

Burberry’s limited edition scarf for Singles’ Day on Tmall

Brands this year have also leveraged in-platform loyalty programmes, pre-order options, and gifts with purchase to increase the value of orders placed online. These tactics allow them to make the shopping experience on 11.11 more attractive for consumers, while avoiding the entire notion of discounting.

Gifts with purchase from luxury brands

Scaling Up With Rich Media

Earlier in October, Taobao Mobile underwent a substantial facelift so as to better leverage rich media elements – more specifically, livestreaming and short videos – within the platform, in lieu of the traditional text-image product listing. While livestreaming and short videos are not new to luxury brands, delivering such rich media content in a manner that is relevant and able to drive conversions in China’s sophisticated digital environment, especially on e-commerce platforms, remains a challenge.

Partnering with top influencers is one of the strategies many brands are considering. Viya, a top Chinese livestreaming influencer with over 36 million followers on Taobao, has won the hearts of brands across different segments for her approachable image and ability to sell. Through specially themed livestreaming sessions, luxury and premium brands can be showcased in a well-curated broadcast, away from other product categories.

On 28 October, Viya unveiled “Viya Fashion Day”, a livestream session especially designed for fashion and luxury brands that saw labels including Alexander Wang, Canada Goose and Piaget taking part. Alexander Wang was among the brands that launched exclusives on the occasion of Singles’ Day, and debuted the items during this livestream. It also opened pre-sales for its Heiress Rhinestone Pouch (in white, as well as in limited bay green colour) – all of which were instantly snapped up during the segment. "As a global brand it is important for us to participate in culturally specific, digitally led events. Participating in Singles' Day event for 2020 allowed us to cater our marketing efforts and creativity towards our brand strategy in China's digital ecosystem," said a spokesperson from Alexander Wang.

Alexander Wang’s Heiress Rhinestone Bay Pouch sold out during Viya’s livestreaming

The number of short videos posted by brands on Tmall has gradually been on the rise as well. Following the revamp of its recommendation feed, short videos that present a full picture of the product, usage scenarios and reviews are slowly becoming part of a user’s product discovery behaviour on the platform. Now, brands not only make use of existing video assets, but also edit and splice recordings of previous livestreaming sessions into smaller bite-sized videos for distribution on the recommendation feed.

Short videos distributed by luxury brands in the recommendation feed

Usage of rich media is not limited to livestreaming and short videos. Following last year’s social mini-game “Gai Lou”, Tmall launched a simulation game “Super Cat Star” for Singles’ Day this year. Users are able to raise a virtual cat and win actual cash by browsing brand store pages and product listings. At the same time, brands can increase their visibility through promotional pages integrated into the game to increase conversions opportunities over the Singles’ Day period.

Synergies Within The Ecosystem

While Tmall’s burgeoning list of rich media elements undoubtedly offers brands many opportunities to engage with consumers, it is the wide range of synergies developed within the Alibaba ecosystem that really seals the deal. Tmall’s success is in part due to the seamless consumer journey offered on the platform – from discovery to purchase with its integrated payment solution, Alipay. With over 900 million domestic users recorded in December 2019, Alipay significantly simplifies the payment process. And given its deep integration with Tmall, this payment option can also provide interesting marketing opportunities for luxury brands.

Huabei – a credit product offered by Alipay’s parent company, Ant Group – allows users to spend in advance, then decide whether to repay the sum in full the following month, or in instalments. Last year, 11.11 saw Huabei offer exclusive credit limit increases to spur consumer spending. This year, brands have also started offering interest-free instalments with periods ranging between three to 24 months, depending on price and category. For the younger generation who are more open to the idea of consuming on credit, this financial solution helps to lower the barriers to entry when it comes to purchasing luxury goods. This can, in turn, impact conversion rates.

In addition, Alibaba’s logistics subsidiary, Cainiao Network, co-operates with other logistics companies to maximise coverage. After a deposit is made for a product, the item will be transferred to the distribution centre in advance. Once the consumer pays the balance, the delivery service is activated. This helps the platform achieve same-day shipping, or even one-hour shipping, while lessening the logistical strain experienced during Singles’ Day events in the past.

As Singles’ Day continues to evolve, luxury brands need to offer consumers more – whether in the form of digital experiences, merchandise (exclusive releases) or even alternative payment options. E-commerce is core when it comes to China’s digital landscape, and brands need to accelerate their activities on this front – from the infrastructure to content and marketing – to stay relevant.

Cover Image: Alibaba

E-commerce | Marketplaces | Tmall