Seeing the Future in a Festival
Since its modest beginnings in 2009 with just 27 participating brands, the Alibaba Group 11.11 Global Shopping Festival has grown into the world’s biggest online shopping event.
Even by the remarkable standards the event already set in the past, 2020 has proven to be a year like no other. This is not just because it was another year of record-breaking numbers, but because 11.11 has come to represent a transformational shift in the world of trade and commerce.
The figures alone are certainly remarkable. More than 250,000 brands participated this year including, for the first time, global names such as Prada, Cartier and Montblanc. About 2 million new products made their debut on Tmall, double that of last year. And more than 800 million customers participated in the festival. In the 11-day event from 1 to 11 November 2020, the festival saw more than 2.25 billion delivery orders generating RMB498.2 billion ($74.1 billion) in sales – up 26% compared to the same timeframe last year.
Here are five key highlights that really set this year’s 11.11 apart.
The Alibaba 11.11 Effect
The Alibaba Group 11.11 Global Shopping Festival was about more than numbers. As the world battles the unprecedented challenge of a global pandemic, this year’s event was about recovery, opportunity and the birth of transformational trends.
Digitalization is the most notable of these trends. In the space of months instead of years, there has been a fundamental shift in consumer preferences and the way that businesses interact with their customers.
For millions of companies, digital transformation has been pushed to the top of the agenda. Many of those companies see China as the center of this transformation. The Chinese economy was among the first to rebound strongly amid the pandemic. In the first half of 2020, online sales in China reached USD730 billion, while the economy grew. Now, about 40% of the world’s e-commerce transactions take place in China, compared with 1% a decade ago.
As a result, this year’s 11.11 represented an important opportunity for brand-building and sales through Alibaba’s digital tools and marketing channels. And for brands that were adversely affected by the pandemic, the festival proved a much-needed lifeline.
This year, a new sales window spanning November 1-3 was added to the main 11.11 event specifically for new brands and small businesses to showcase their products and tell their stories during the pandemic. More than 110 brands achieved RMB100 million ($15.1 million) in sales within the first two hours alone. 357 emerging brands became top sellers in their respective subcategories during the 11-day campaign.
11.11 is Global
The 11.11 Global Shopping Festival is not just the biggest online retail event, it is also the most international. Tmall Global saw 1.2 million new products launching on the platform to Chinese consumers with more overseas merchants participating this year, compared with 2019. From east to west, the diverse range of merchants and consumers reflected the growing trend of borderless e-commerce.
This year, Tmall Global hosts more than 25,000 overseas brands from 92 countries, offering them tools and incentives to flourish in the Chinese market while AliExpress sells to more than 200 countries.
The influence of 11.11 on the retail landscape goes far beyond China. In Southeast Asia, for instance, online marketplace Lazada, majority owned by Alibaba Group, first hosted the 11.11 event eight years ago. The event is now a key growth driver for small and medium businesses. This year, Lazada showcased over 350,000 regional and international brands and sellers across Indonesia, Malaysia, Thailand, Singapore, the Philippines and Vietnam.
The Southeast Asian event alone saw a 20-fold increase in domestic and cross-border deliveries for Lazada, fed through a network of 45 logistics partners, 15 warehouse facilities and more than 400 fulfilment centers.
With increased cross-border commerce, the demand for frictionless trade has grown. Here, Alibaba’s world-leading payments technologies and logistics infrastructure made that possible. Meanwhile, advances in logistics mean that shoppers in European countries could look forward to 30% faster delivery times – as short as three days in countries such as Spain, France and Poland.
During the 2020 Festival, Alibaba’s logistics network handled more than 2.25 billion delivery orders, while Alibaba’s logistics arm Cainiao chartered around 700 flights to ensure rapid cross-border purchase deliveries.
Livestream Goes Mainstream
While e-commerce is taking hold worldwide, China is at the epicenter. Hundreds of thousands of brands rely on Alibaba’s digital tools and marketing channels to help them tap into the China market.
One such tool is livestreaming, undoubtedly one of the defining retail trends of the pandemic era. About 560 million people in China have used shopping livestreams in 2020, almost five times that of 2019, with Taobao Live being the dominant platform for this surge. Gross Merchandise Value generated by Taobao Live exceeded RMB 350 billion ($52.8 billion) in the 12 months ending September 30, 2020.
Livestreaming took center stage at this year’s 11.11. About 400 company executives and 300 celebrities, along with professional sellers, held livestream events. In a short space of time, livestreaming has evolved into a fully-fledged e-commerce medium. The Tmall 11.11 opening ceremony on October 31 seamlessly fused live performance, live television and e-commerce channels to become the most-watched broadcast in China that day, with more than 200 million viewers. Over 30 livestreaming channels featured on Taobao Live each generated more than RMB100 million in sales during 11.11.
Taobao Live sessions offered not just consumer products like cosmetics and electronics, but cars and houses using new features, such as online property viewings and virtual test drives. As well, Alibaba’s DAMO Academy used its AI expertise to create its first virtual livestream host.
Going Hyperlocal
The spirit of innovation is driving another pioneering trend in China: online-to-offline (O2O) retail. As shops around the world pull down the shutters, Alibaba’s online retailers in China are actually helping to revive traditional bricks-and-mortar shopping.
Across China, Alibaba is creating hyperlocal marketplaces where online customers can connect with offline services and on-demand deliveries, enabling more consumers and small businesses to gain the confidence to move their operations online.
This year, 11.11 went beyond online shopping for physical products. Alipay, together with Alibaba’s local services platforms, such as Tmall Supermarket, Ele.me and Taoxianda, also offered digital vouchers for services and experiences such as dining, beauty treatments, travel and entertainment.
Freshippo, which combine the ease of mobile commerce with the tactile assurance of the physical grocery store, now has about 200 stores across the country, while O2O food and catering delivery platform Ele.me has become the largest in China partnering with overseas giants including ALDI.
Intelligent Manufacturing
Digitalization has driven many trends, but one of the most transformative is artificial-intelligence driven manufacturing. Globally, manufacturing is the single largest market for AI technology. It is forecast by Gartner to be worth USD800 billion by 2025.
In September 2020, Alibaba unveiled a world-first: Xunxi Digital Factory. This factory offers a vision of how manufacturing powered by cloud computing, AI algorithms and the Internet of Things will look.
Unlike traditional factories, which make pre-determined sets of products to pre-determined designs, Xunxi’s production is user-centric, steered by consumer insights and real-time trends gathered from Alibaba’s e-commerce platforms.
The factory’s initial application of this technology for apparel and fashion illustrates how Alibaba helps small businesses prepare for events like 11.11 by sharing sales data and analysis, and shortening production lead times.
Traditionally, to get ready for 11.11, sellers have to prepare inventory months in advance, and rely on past sales records – a guessing game that can be very costly. This year, Xunxi turned the formula around and helped to forecast what would be the top-selling items.
In the past, SMEs needed about 90 days to get ready for 11.11. Xunxi’s data-powered insights and flexible manufacturing enabled them to cut that period to just two weeks. As with many of the other trends at play during 11.11, this has enormous implications for businesses across all industries.
What started as a small online shopping event twelve years ago has evolved into an influential force on a global scale. Today, 11.11 reflects the most important lifestyle, commerce and technology trends that are shaping our world. With each event, we’re seeing the future of commerce unfold before our eyes.
