China Singles Day 2022 - 3 Reasons to be cheerful!
14 Nov 22 | 5 min read | By Adam Sandzer
With economic and COVID-19 related uncertainty dominating global media headlines, commercial expectations in the run up to this year's Singles Day amongst China watchers was dampened. Much has been made of the fact that for the first year on record, Alibaba and JD.com have not been forthcoming with dazzling numbers of year-on-year GMV growth. This indicates total average growth on previous years is likely to be flat, or possibly negative.
However, among the dampened overall numbers there are strong indicators of growth and optimism in number of key sectors as identified across Hot Pot China’s work.
Here are 3 Reasons to be cheerful!
All smiles!
The event saw sustained and significant gains in categories associated with improving lifestyle and wellness
Sports and outdoor continued to grow very strongly with self care and healthy lifestyle trends retaining a major influence. Established brands like Lululemon, Lanvin and Canada goose continued to perform well.
Linked to this, skincare, hair care and beauty boomed with niche, ingredients-led brands challenging the status quo. Global brands like SkinCeuticals, La Prairie and NARS were successful in taking share.
The home improvement consumption trend drove 20%+ year-on-year growth for home and kitchen appliance categories
There were additional and notable mentions for jewellery, pet products and consumer electronics categories
Whilst the above offer reason for optimism, TPs and China watchers are also speculating that there was an overall 25% decline in Tmall sales, meaning that optimism should very much be applied to the individual winners rather than the festival as a whole.
Increased platform diversification strengthened brands and consumers hands in the battle for share of wallet
Tmall remained number 1, albeit with the above mentioned overall dip in sales. A shorter pre-sales period with deeper discounts and push towards dynamic live stream channels had positive effects
JD.com focussed on their superior logistics with the promotion of their new department store categories and new field retail. They saw moderate growth but with deep discounts and category performance was said to be polarized.
Whilst not as extensive as predicted, Douyin did gain share through an extended event timeline, versatile consumer benefits and adjusted traffic distribution mechanism. Rumours persist that cosmetics sales exceeded those on Tmall but data is yet to be published.
Pinduoduo launched a RMB 10 billion subsidy campaign that made products available on the platform cheaper than anywhere else. This saw them become increasingly popular across all Chinese City tiers
Brands and TPs that looked beyond the negativity, planned methodically and with cautious optimism saw greater levels of success
The proportion of sales driven via KOL livestreams grew further. The return of mega-streamer Austin Li undoubtedly contributed to this, but brands that looked for and secured new and upcoming talent early also saw significant benefit
As expected discounts remained significant but holding a solid pricing architecture had a positive impact with brands able to hold firm on newer and more exclusive items. Off-season or expiring products were used as gifts or sold as ‘loss leaders’ to generate traffic.
Whilst difficult to predict, careful inventory planning proved important, especially ensuring plenty of availability for best-selling items. Conservative brands found themselves running out of stock early and missing sales opportunities
The latest tech-enabled retail innovations (virtual reality, metaverse) were activated and offered a window into the future, albeit with limited immediate effect
What’s the Hot Pot Perspective?
Singles Day did not generate the buzz or hit the heights of previous years but remains the biggest sales promotion event in the world. Moreover, globally recognised brands, especially in the star categories of sports & outdoor, skincare, beauty, homeware and jewellery, can take a lot of encouragement from the final results.
It’s safe to say that for any brand with ambition, China remains a market that cannot be ignored with Double 11 a key date in the annual calendar. Many of the strong performers have excellent, insight-led strategies in place for their platform focus, influencer marketing and product. For those seeking to emulate their success, we recommend seeking out dedicated local market expertise.
To find out more about how you can deliver greater commercial return in China, drop us a line at nihao@hotpotchina.com