By Joanna Perry | Head of Marketing

Four days after the big event, and if you take an interest in Chinese ecommerce then you surely already know all about 11.11 2018 results.

Alibaba's 10th annual Global Shopping event - as it has been rebranded - demonstrated once again that there is an ever increasing appetite from Chinese consumers to buy goods online.

The record breaking sales figures of US$30.8 billion will have come as little surprise to many; but delving below the topline, what else can interntional brands learn about China and Alibaba's strategic direction?

China's middle class demand international brands

Though China is now developing strong brands of its own in many product categories, 2018's 11.11 sales results demonstrate the continued attraction to Western goods. Top selling countries were Japan, USA, South Korea, Australia and Germany.

More than 40% of Tmall's customers bought from international brands, including Apple, Dyson, Nestle and Nike; who were all included in the list of 237 brands who topped sales of RMB100 million (USD$14.4 million) on the day.

Interestingly, Kindle was also in this top-selling brands list, demonstrating that Tmall will sell anything - even its main global competitor's products - if there is Chinese demand. 

In fact, less than a week before 11.11, Alibaba released news that it plans to import USD$200 billion of goods into China in the next five years. Between 2014 and 2017 the cross-border marketplace Tmall Global's customer base has grown 10-fold, and the percentage of total ecommerce sales that are cross-border grew from 1.6% to 10.2% in the same period.

Alibaba CEO Daniel Zhang says that globalisation is one of Tmall's key growth strategies, and in its 11.11 2018 results announcement, pointed comments were made about geopolitical tensions, and how China's middle class are ignoring threats of a trade war to buy cross-border.

11.11 2018 blog - Daniel Zhang.jpg

11.11 2018 goes offline

Also of note is Alibaba's inclusion of bricks-and-mortar stores within the event. It claims that 200,000 "smart stores", which have deployed some level of digital techology, participated in 11.11 this year. Alibaba also offered USD$144 million in red packet coupons for customers who purchased from participating retailers in store.

The business' mantra of "New Retail" - an omnichannel model for selling to consumers - is not just talk. This year's event proved the seriousness of Alibaba's strategy to play a part in both online and offline retailing. The efforts of international players such as Amazon and Google to play in the offline world look tame in comparison.

Alibaba will be further pushing Chinese retailers and international brands with stores in the country to ensure that they have single stock pools and inventory systems, in order to better serve consumers who want to shop both online and offline.

More than 80% of Chinese retail sales are still done offline, and Alibaba is eyeing that prize to secure its own future, mindful that economic growth of the level that China has seen in the decade since 11.11 began cannot be guaranteed.

If your 11.11 2018 results didn't live up to the hype, or you are an international brand who would like to be up and running on Tmall in time for Singles' Day 2019, then contact us at hello@practicology.com for advice and support from our Greater China team. 

 

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