Alibaba’s 11.11 Signals China Retail Health, A Boon for International Brands
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If there were any lingering doubts about the health of China’s retail sector, the $74.1 billion in gross merchandise volume transacted during Alibaba’s 2020 11.11 Global Shopping Festival should erase them.
The 11-day promotion — the world’s largest shopping event — shattered multiple records, as Chinese consumers flocked to homegrown and international brands. This year, the event featured two shopping windows, the first from Nov. 1–3, and the second for 24 hours on Nov. 11 to offer more opportunities for brands and merchants to extend deals to consumers.
Total GMV for the event was calculated from Nov. 1–11, and easily beat last year’s $38.4 billion figure. The GMV for U.S. brands taking part was $5.39 billion for the entire shopping period, the largest contribution from a single country or region outside of China, said Alibaba President Michael Evans. The results point to something very important for U.S. and other international brands.
“A China strategy — and a digital strategy — are going to be absolutely critical for success in the future,” Evans said.
Overall, 474 brands participating in 11.11 each surpassed RMB100 million in GMV this year.
“The Chinese economy has bounced back to pre-pandemic levels,” said Alibaba founder and Executive Vice-Chairman Joe Tsai.
But the shopping festival had an added dimension this year. With much of the world still feeling the effects of the Covid-19 pandemic, 11.11 offered international brands a welcome opportunity to sell into the world’s second-largest economy. And for China’s Millennial and Gen-Z consumers, who have been largely unable to travel internationally, attractive and innovative 11.11 deals from international brands were well-received.
Digital Breathes New Life into Luxury
With the reduction of foot traffic to their brick-and-mortar stores during the pandemic, international luxury brands took the opportunity to work more closely with the three-year-old Tmall Luxury Pavilion this year.
“Covid-19 has changed the world, and we all went more digital. So, what was already a very strong digitalization has just accelerated another source of convenience for the customer,” said Coach China President and CEO Yann Bozec.
Nearly 200 luxury and designer brands on Tmall Luxury Pavilion participated in this year’s 11.11, doubling the number of brands from last year. Many top luxury brands also joined for the first time, including Prada, Cartier, Vacheron Constantin, Piaget, Balenciaga, Kenzo and Chloe.
According to Alibaba’s latest figures, over 90% of the participating brands’ GMV had surpassed their 11.11 full-day sales records from last year, including Net-a-Porter, Bottega Veneta, Qeelin, Coach, Michael Kors — all of which had hit that milestone within the first hour of the event.
Alibaba Cloud Upgrades 11.11’s Digital Infrastructure
One unsung hero in ensuring 11.11 is always able to scale is the cloud infrastructure provided by Alibaba Cloud.
Last year, Alibaba Cloud focused on bringing as much of 11.11’s technology onto its cloud services. This year, it went further, deploying cloud-native technologies that supercharged the shopping event’s infrastructure.
At its peak, the technology allowed processing of a record 583,000 orders per second just 26 seconds after midnight on Nov. 11. That is over 1,400 times the capabilities at Alibaba’s debut 11.11 festival 12 years ago.
Alibaba Cloud technology forms an elastic infrastructure to handle sudden volume surges with zero downtime. Optimal elasticity and scheduling capacity led to an 80% reduction of computing resources for every 10,000 transactions conducted, compared to four years ago.
Livestreaming Moves Front-and-Center
Once new and “nice to have,” livestreaming to educate consumers and sell products has taken center stage in China’s online shopping, as consumers seek a fully immersive experience.
“Shopping is a sport and entertainment,” said Tsai. “It’s not just going onto a website and scrolling through a product catalogue.”
This year, 28 livestreaming channels on Taobao Live each surpassed RMB100 million in GMV. Their ranks include pioneers and stars, such as Viya Huang and Austin Li.
But the livestreaming market has become much more diverse and nuanced since last year. Some companies are training up and bringing on their top executives to connect with consumers.
DAMO Academy Technology Has a Moment
Livestreaming got an extra assist this year from Alibaba’s DAMO research academy, which offered a couple of key homegrown artificial intelligence-based advances in the technology.
First, merchants streaming on Taobao Live for 11.11 were this year able to harness DAMO’s “virtual anchor” technology to keep their channels going 24/7. The AI-powered avatars interact with audiences and answer their questions about consumer products using intelligent cognitive and perception technologies. The virtual anchors rely on multi-module algorithms that include natural language processing and speech recognition.
DAMO also championed real-time translation capability during 11.11 livestreaming sessions on international e-commerce platform AliExpress. The technology is based on a self-developed speech algorithm that cancels out ambient and irrelevant noise, understands slang, colloquialisms and industry terms. It works with multiple language pairs, allowing viewers to watch a Chinese livestream and see what’s being said, real-time, in English, Russian, Spanish or French.
DAMO was also behind the technology for the newest autonomous delivery robot in Alibaba logistic unit Cainiao’s fleet. The XiaomanLV was deployed at Zhejiang University, wending its way safely and carefully through complex traffic conditions on and around the campus. It was expected to deliver 30,000 packages during this year’s 11.11.