Notes from Hangzhou: Alibaba CMO Chris Tung on behind-the-scenes of 11.11

Chinese e-commerce major Alibaba has been turning shopping into a festive occasion, making consumers feel special about shopping. This is a platform to support brands from all over the world, encourage small & medium enterprises as well engage with their online customers. As the platform becomes bigger, it has also become more effective for brands, besides consumer benefits have also evolved.

Chris Tung, CMO, Alibaba Group, professes to having a fun job doing marketing to support the brands and merchants that build their business on Alibaba’s platform. It’s a multi-dimensional effort, which also reflects on the annual 11.11 Global Shopping Festival.

As Tung says, “The key here is that this has to feel like a festival and not just a promotion. Since it is a global festival, we work with global leaders and the entertainment & music industry to really make it to the top.”

Addressing the media, Tung further said, “The 11.11 is probably the most efficient platform for you to launch new products and to get feedback and to collect responses. Those are the things we want to keep doing to satisfy the shoppers everywhere. We’re going to continue to explore the best of technology to be able to make a platform as efficient as it is in China and to support not only the big brands, but the SMEs as well.”

Consumers are really connected to the consumption trends and lifestyle around the world so much so that they also compare themselves with the life quality in the developed countries. They demand the best quality products from the brands they love, so the key thing to keep driving in those areas is innovation.

Tung informed that Alibaba is driving initiatives like the Tmall Innovation Center (TMIC) programme, where they are working with hundreds of global brands and supporting them with insights from the platform and guiding them in a new direction of the possible innovation area for their product launch.

Launched in 2014, Tmall Global is a dedicated channel for cross-border e-commerce. It is the largest cross-border B2C online marketplace targeting the China market and allows brands and retailers without operations in China to build virtual storefronts and ship products into China. Today, there are more than 22,000 brands from 78 countries and regions on Tmall Global. Medium to larger-sized brands with existing brand awareness in the China market can open flagship stores on Tmall Global as a cornerstone of their China-specific branding and sales strategy and engage with their consumers in China. Brands who are newer to the China market may choose to list select products on an Alibaba storefront, which presents an easy and efficient way for brands to test the waters with the Chinese consumers.

As per reports, in the January-July period of this year, Tmall Global saw a 300 per cent year-over-year growth in the number of new brands joining the platform for the first time.

“From a brand and merchant standpoint, this not just for selling or promotion, but something very basic, where we are selling the product based on their business agenda to really engage a huge number of customers and collect feedback,” Tung added.

Consumption patterns

Tung shared some insights on Generation Z derived from the several studies and research conducted. He said, “One of the key things is that GenZ is driving most of the consumption in China today. They are not settlers with common products from household brands. They are a daring and adventurous group that is willing to try new products and boutique brands that will present their individuality or eager to drive new products.”

Today, in the context of China, brands need to really express themselves by offering consumers something unique. The other key thing around the world is probably how brands communicate with people.

New Consumption & Green Action

Tung further said that as the platform upgraded itself, the number of sales, the GMV and the number of parcels have gone up. Last year, the festival delivered one billion parcels and expects the number to be far higher this year.

GMV for the 2019 11.11 Global Shopping Festival is 268.4 billion (USD 38.379 billion), while the number of parcels sold is 1.292 billion.

Alibaba is leveraging its technologies to create redefined consumer experiences and meet the growing demand of Chinese consumers for new brands and new products.

New products: One million new products reported to be on offer and 215 leading international brands such as Lancôme, SK-II, YSL Beauté, Givenchy and Shiseido debuted more than 240 11.11-themed special edition products.

Tmall 2.0: Thousands of brands and merchants rolled out their upgraded stores, called the Tmall Flagship Store 2.0, during 11.11. The stores offer brands more tools and opportunities for customisation to deepen engagement and interaction with their consumers.

Nationwide Recycling Day: “This year, we have been focusing a lot on making 11.11 greener, so on November 20, nine days after the festival, we are going to hold a major national recycling event. We created 75,000 recycling stations around China to recycle the cardboards and reduce the consumption of plastic,” Tung said.

Tmall trade-in programs: Tmall will also host special “trade-in” programs to allow consumers to replace over 40,000 used electrical and digital products from 250 brands for new ones.

Recycling programs: 40,000 Cainiao stations and an additional 35,000 stations operated by its express courier partners will serve as recycling centers for consumers to drop off cardboard boxes. Consumers will be also be rewarded “green energy” points on Ant Forest for their recycling efforts.

Exploring new markets

“We see a great opportunity to push our services deeper into China. In FY2019, 70 per cent of our new consumers came from less developed areas. In the same period, there was 40 per cent of e-commerce penetration in those areas. It’s a huge opportunity for us to grow and I think it’s our duty to be able to offer the best experience to everybody, including people living in less developed areas. We are pushing for that, hence, you will see much more people joining us in this 11.11 from those areas,” Tung said.

Meanwhile, mobile monthly active users increased by 236 million over the past two years (as of September 2019).

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