Author | Sang Mingqiang

The annual discussion about 'Singles' Day has been a timeless topic in recent years.

This concept of an e-commerce promotion, first introduced by Alibaba in 2009, has long been regarded as a barometer of changes in China's e-commerce industry: countless high-frequency transactions occur here, accompanied by a surge of new business opportunities. Each year, numerous emerging brands gain recognition and enter the public eye from this platform.

But this year is different.

Compared to the early years of 'Singles' Day, the landscape of China's e-commerce industry has undergone tremendous changes. Although the rise of new formats such as live streaming and interest-based e-commerce has shown that there is still much potential in e-commerce, issues like refund scams and irrational low-price competition have gradually deviated the market from its normal track. A large number of brand merchants have been 'hijacked,' and their product innovation capabilities and cycles have been significantly compressed.

This has led many to worry about the future of China's e-commerce industry, while others see it as a sign of a new cycle beginning.

iResearch Consulting once pointed out in its "2024 China E-commerce Market Research Report" that as China's e-commerce market enters a bottleneck period, fundamental changes have occurred in the supply-demand relationship within the market. Most notably, consumer demand is increasingly stratified and categorized, especially the demand for improved quality of life.

This is indeed the case.

According to official data from Tmall, from the start of 'Singles' Day to the evening of the 31st, a cumulative total of 373 brands achieved sales exceeding 100 million yuan. Among them, there was notable growth in major brands across various industries. Take cosmetics as an example: within four hours of the sale, 40 Tmall Beauty brands surpassed 100 million yuan in sales. Familiar brands like La Mer and Proya experienced strong growth, with sales exceeding 100 million yuan within just 10 minutes of the sale starting.

This is an interesting shift.

On the one hand, after experiencing the impact of various e-commerce formats, Taobao and Tmall remain the main battlegrounds for the explosion of various branded products. Compared to other platforms, they have stronger capabilities in new product incubation and consumption leadership. On the other hand, as a mirror reflecting the changes in China's e-commerce industry, the concentrated explosion of branded products during 'Singles' Day signifies the gradual return of middle-class consumption power and confidence.

The crux of the matter is how to understand the recovery of the consumer market and what structural opportunities exist within it?

01

Consumers and Merchants Are Changing

Platforms Are Changing Too

As 'Singles' Day enters its 16th year, it has evolved from traditional browsing on Taobao and Tmall to 'finding what's hot on Taobao and Tmall.' Taobao and Tmall's understanding of 'Singles' Day is no longer just a transaction venue but has returned to being a consumption venue that aligns with public interests and hobbies.

Jialuo, Vice President of Alibaba Group and President of Tmall, once stated that the biggest difference between this year's 'Singles' Day and previous ones is that it serves as a crucial time window for activating the overall consumer market and enhancing nationwide consumption.

According to Jialuo's logic, entering a new cycle of e-commerce promotions, as a platform, it is far from sufficient to merely consider how to achieve more transactions.

More importantly, it is about serving as a connector between consumers and brand merchants. Only by truly understanding what consumers care about and lack, and providing them with targeted quality products and services, can the flywheel of consumer confidence truly spin, rather than being driven by irrational low-price incentives.

Take cycling, which has been popular in recent years, as an example. From the rivalry between Wout van Aert and Tadej Pogačar at the Tour de France to the enduring popularity of different road bike brands and their accessories, this trend has also gained momentum domestically.

But interestingly, despite cycling's recent popularity, searching for cycling-related keywords on Tmall still yields a plethora of quality products. Take the domestic cycling apparel brand Lampada as an example; this is its 13th participation in 'Singles' Day. Benefiting from its long-term investment in Tmall, it ranked first in both scale and growth rate in the cycling equipment category on the first day of pre-sales.

It's important to note that these cycling equipment items are not cheap. The 'One King and Four Queens' road bike brands favored by cycling enthusiasts often cost tens of thousands of yuan. In other words, compared to lower prices, consumers' focus on such products lies more in brand culture, craftsmanship, and the social attributes behind them, which were easily overlooked by the market in the past.

In fact, it's not just outdoor sports; emerging categories such as collectibles and pets, which we are familiar with, also experienced a concentrated explosion during this year's Tmall 'Singles' Day. According to research by data agency JQ Research, as the main incubation platform for the rapid growth of new categories, collectibles, pets, and outdoor markets accounted for 69.7%, 66.0%, and 56.5% of the market share, respectively.

Various signs indicate that e-commerce consumption is about to enter a new cycle. The world-renowned investor Howard Marks once expressed a view in his classic book "Mastering the Market Cycle": "To study cycles, first study people; to study people, first study human nature, which manifests itself through psychology and emotions."

This logic still holds true in today's e-commerce consumption sector. When 'lowest price on the internet' is ubiquitous, consumers' previous habit of 'buying something as soon as they see it' has ended. Their attention has shifted back to brands with quality assurance, and they make concentrated purchases when discounts are significant.

This is evident in this year's 'Singles' Day, where the previous aggressive promotional tactics are no longer used. Instead, there is a more nuanced and targeted approach to activities that understand consumers and align with brand merchants.

02

Concentrated Explosion of Branded Products

Cultivating the Soil Is Crucial

Many people attribute the delicate position of traditional e-commerce in recent years to the impact of emerging forces, but they overlook the fact that e-commerce is not inherently divided into old and new. Rather, today's China's e-commerce industry has reached a historic juncture—users are changing, their needs are evolving, and technology is reshaping old rules and orders, bringing enormous opportunities.

Jeff Bezos, the founder of Amazon, once made a bold prediction that three things in the retail industry will remain unchanged for the next 20, 30, or even 50 years: customers prefer low prices, fast delivery, and more choices with faster speeds.

To a certain extent, fast delivery and lower prices are essentially issues of supply chain efficiency, while more product choices stem from the ever-changing nature of consumers. They will never be satisfied with a certain lifestyle or cease to pursue certain desires.

According to Bezos' description of retail essentials, we find that the emerging e-commerce players with various labels on the market have not changed the fundamental elements of retail but have introduced more models and technological innovations on this basis. Conversely, the system standards established over two decades in the e-commerce sector, led by Taobao and Tmall, are precisely what these new players lack the most.

Worse still, due to fierce competition among platforms and the relentless pursuit of low-price strategies, the past e-commerce market exhibited a brief period of irrational prosperity. However, problems arose as a result: product quality and service levels were constantly compromised, malicious refund scams and profiteering became rampant, and in some cases, research and development, innovation, and quality were compromised in the face of price comparisons.

Obviously, leading players are also aware of this issue. To escape this low-quality competition, changes and responses are necessary, especially for leading e-commerce platforms that connect numerous brand merchants and source factories on one end and hundreds of millions of consumers on the other. Cultivating a healthy environment is crucial.

Take Taobao and Tmall as an example; they have focused their efforts this year on improving the business environment and 'unbinding' merchants. On the one hand, there has been unprecedented support for new and popular products and brands. Taking this year's TOPTALIK as an example, Tmall announced that it will continue to invest in super IPs such as Super Brand Day to promote the dual upgrade of brand marketing and operations, aiming to launch 5,000 Super Box super new products and cultivate 100 new brands with sales exceeding 100 million yuan this year.

On the other hand, ahead of 'Singles' Day, measures such as unbinding 'only refund,' introducing 'Return Guarantee,' and breaking the industry's low-price competition with 'Experience Score' were implemented. Coupled with government subsidies, interconnectivity, and other factors, the marketing environment is becoming more favorable, allowing this year's 'Singles' Day to return to its original purpose—facilitating growth for merchants and benefiting consumers.

The effects of this transformation are evident.

According to monitoring data released by the State Post Bureau, during the 'Singles' Day' period, there was a significant increase in the collection and delivery of express packages in China's postal and express delivery industry. On October 22nd alone, 729 million express packages were collected, representing a year-on-year increase of 74% and setting a new record for daily business volume. Behind each package and order lies the vitality of industrial belt consumption and the return of consumer confidence for brand merchants and source factories.

03

Summary and Some New Discoveries

Compared to previous years, when the focus was on growing e-commerce sales (GMV) data, this year's 'Singles' Day has a different emphasis, placing more importance on branded products, quality, user experience, and the e-commerce ecosystem. This was mentioned as early as this year's TOPTALIK conference. As the annual strategic communication conference, Tmall proposed that the focus of this year's work would be on 'focusing everything on brand growth.'

Considering the explosive growth of branded products during this year's 'Singles' Day, the results are not surprising. Additionally, there are some interesting phenomena worthy of in-depth study. For example, considering 88VIP members, from the start of 'Singles' Day pre-sales to the 31st, the number of 88VIP members placing orders increased by over 60% year-on-year, with a year-on-year increase of over 30% in per capita spending and a 50% increase in 88VIP member visits.

This is a noteworthy statistic.

It's important to understand that a successful membership system is not just a goal for leading e-commerce platforms but also the ultimate pursuit of many retail formats. The underlying logic of traditional membership systems is that 'the wool comes from the sheep; money earned from consumers is partially returned to them.' In contrast, the design philosophy of 88VIP is to 'start from the customer experience, design a membership product system, and attract a large number of consumers through a good experience while operating traffic and strategies.'

As the most valuable demographic asset for Taobao and Tmall, 88VIP members spend an average of 25 days per month browsing the Taobao app. Compared to regular members, they not only have higher purchasing power but also a stronger sense of brand identity. The number of quality members is often directly related to platform maturity, and their performance during this year's 'Singles' Day' illustrates this point.

Returning to the initial topic, although this year's 'Singles' Day feels less intense than previous years, from a higher dimension, when quality and branded products return to the public eye, and the consumer market returns to rationality, showing strong signs of recovery, it is far more meaningful to discuss these aspects than 'Singles' Day itself.