The 618 Shopping Festival, 2020

Yesterday marked the annual 618 eCommerce shopping holiday across China. For those in the know, 618 is a shopping holiday developed by JD.com to mark their birthday (June 18th, 1998). This year. JD reached GMV sales of ￥269.2 billion (US$37.9 billion). This represents a 33.6% YOY from last year's ￥201.5 billion. JD also celebrated with a public listing on the Hong Kong Stock Exchange (HKEX: 9618.HK).

However, in recent years 618 has evolved into a broader shopping holiday embraced by all platforms. For example, major competitor Alibaba also celebrates the date with a wide variety of promotions. Alibaba are set to release their 618 sales figures at 11:59pm this Saturday (20th). However, their 2019 sales were ￥268.4 billion - a figure on par with JD's 2020 haul and representing a 26% YOY rise on their 2018 haul.

The event has grown consistently in recent years in line with rising discretionary incomes and consumer sophistication. However, word on the ground is the ‘hype’ surrounding 618 is gradually losing steam. There has been a notable absence of 618 promotional materials in subways and elevators across China this year. In the words of Aubrey from our Guangzhou team:

Why is this happening? The global pandemic is sure to have limited this year’s sales to an extent. However, beyond this, it’s also important to understand that major sales promotions are now a monthly occurrence in China. Starting from January through to December, we have Chinese New Year, Valentine's Day, Women's Day, Tomb Sweeping Day, 5:20, 6:18, Little Red Book's Birthday, Chinese Valentine's Day, Mid-Autumn Festival, National Day and Golden Week, Singles Day, 12:12. and Christmas. 

Singles Day (11:11) retains a strong position as China’s premier shopping event. However, the growing volume and frequency of other monthly promotions is arguably diminishing the significance of the remainder. All this said, 618 still represents the second largest shopping event in China’s eCommerce calendar. As such, it is an integral part of your annual sales cycle; requiring a delicate, integrated, multi-platform strategy.

How to Prepare in the Months Leading Up to 618

First of all, you need to be proactive. Platforms generally only extend invitations to participate in 618 promotions in May. However, to participate, you’ll need sufficient inventory already locked away in the relevant bonded warehouses - one month in advance. The May 18 warehousing cut-off by extension entails a shipment cut-off of roughly April 18th. Furthermore, you can probably anticipate June sales volumes of roughly 1.5 - 2.5 times your usual trading range. You can start to see why three-month rolling inventory forecasting is so paramount.

In other words, you’ll ideally need to start planning everything by late March. This includes your marketing and sales campaigns. With pre-orders commencing in June, your 618 sales campaigns will need to kick off in May.

Pre-Order Period (June 1st - 17th)

The early weeks of June represent the pre-order period. Customers can order products in advance to ensure they don’t miss out on any great deals. This is a period of heightened competition for ad-space, so be smart where you allocate marketing budget.

The pre-order period requires delicate campaign coordination across your digital platforms. For our readers who are new to China, it’s important to understand that Tencent, Alibaba and Bytedance intentionally limit the interactivity of their own platforms with platforms outside their respective ecosystems. For example:

• WeChat only supports links to other WeChat accounts/programs as well as JD.
• Douyin campaigns can link to your Douyin mini-programs, Tmall, Taobao and JD stores.
• Weibo campaigns link seamlessly with Weibo’s eCommerce function, Tmall, Taobao and Kaola.
• LRB posts may only link to LRB stores. Although, most users tend to navigate offsite manually for price comparisons.
• Similarly, no social media platforms can link directly to VIP Shop.

[Source: Kawo, 2020]

?? Influencer Marketing: A Bare Minimum ‘Pay to Play’

Our strong recommendation is to leverage Key Opinion Leaders and Key Opinion Consumers. Influencers stake their reputation on the products they promote. This creates a short-cut to achieving trust amongst China’s notoriously sceptical and highly discerning consumers. Influencers nurture positive word of mouth and user-generated content across a variety of platforms. For a quick crash course on how to locate and engage with influencers, check out last week’s article on Xiaohongshu [Little Red Book (LRB)].

[Above] Screenshots from RooLife's recent 618 pre-promotional livestreams for Celebrity Slim.

Livestream sales campaigns and events are no longer optional either. At RooLife Group, we strive to ensure daily livestream event per client throughout the pre-order period. For Tmall stores, you’re looking at promotions on Taobao Live. Meanwhile, JD store operators were able to take advantage of the video and livestreaming services of Douyin rival Kaishou.

?? Taobao Juhuasuan: Alibaba's Flash-Sales and Group-Buying Platform

Importantly, much of the vital promotional activity takes place within the eCommerce platforms themselves. As we discussed several weeks ago, Tmall flagship store operators benefit from a variety of Alimama marketing tools. Alimama tools support a variety of marketing services, including:

• Media buy: bid-based ad and banner placements
• PPC: keyword and ranking bids
• Big-data insights and targeting and retargeting

One of the more important channels Alibaba provides for the 618 festival, however, is Juhuasuan. Juhuasuan is Taobao’s answer to VIP and Pinduoduo. Users can navigate directly to Juhuasuan to take advantage of D2C Group-buys and flash sale promotions. Juhuasuan is in effect, Alibaba’s 618 promotional hub. On invitation from Alibaba, Tmall merchants can take full advantage of Juhuasuan’s 618-specific targeting and advertising tools.

Official 618 Event

The day before the official event (the 17th), you’ll want to double check that everything is prepared for the day. This entails double checking the CPC and marketing tools are working effectively, that customer-care systems are operational, designs and landing pages are all set up etc.

Like Singles Day, 618 commences and finishes at midnight (00:00 – 23:59). As such, third party eCommerce operators (TPs) such as ourselves tend to break the day up into 8-hour shifts.

• 6pm (17th) to 2am
• 2am – 10am
• 10-am – 6pm
• 6pm – 2am (19th)

The event itself is exciting and fuelled with adrenaline. You’ll need a team of people on standby to handle surging demand for customer service. Similarly, you’ll need a designer at the ready in case any issues arise with your store requiring a fast revision. Technical, logistics and platform managers generally need to be ready and on high alert to ensure the seamless operation of key systems. Similarly, your marketing, sales and finance teams need to be actively monitoring micro-promotional opportunities which arise on the day.

Although the environment is high-pressure and stressful, it’s also an immensely entertaining, bonding and team-building exercise. It is a day where lǎobǎns (bosses) celebrate the hard work of their staff. workers enjoy free team meals, and they also generally receive red packets to spend as they wish. In spite of the added pressure, 618 is a day we all look forward to.