Here’s what this Chinese e-commerce major is doing to drive user growth amid intense competition

June 5, 2023 | By Rupkatha B

Here’s what this Chinese e-commerce major is doing to drive user growth amid intense competition

Within the first hour of 6.18 global beauty brand L’Oréal clocked sales worth over RMB100 million ($14.02 million) as did Estée Lauder, Lancôme and China’s Proya Cosmetics on Alibaba’s marketplaces.

All signs are pointing towards Chinese consumers’ willingness to spend again, fuelling the success of 6.18 mid-year shopping event (running from June 1 to June 18 – the date when was founded). 6.18 is China’s second-largest retail event after Single’s Day in November.

Attractive discounts spurring consumer spend

To leverage the power of this shopping event Chinese e-commerce major Alibaba has strategically planned to drive-up user growth for its digital marketplaces Taobao and Tmall through attractive discounts on over 60 million products.

Between May 31 and June 3, every time consumers spend RMB300 ($42.13) or above on Tmall, RMB50 ($7.02) will be automatically discounted from their bill. While on Taobao consumers will save RMB30 for every RMB200 ($28.09) or above they spend. In addition, to satiate “deal hunters” Taobao has subsidised consumer spending to the tune of RMB10 billion ($1.40 billion) during the 6.18 shopping festival.

Further, capitalising the FOMO [fear of missing out] sentiment these platforms have curated limited time offers. For example, from June 4-13 on Tmall skincare, clothing and home appliances will each have a 72-hour shopping window with special discounts, whilst imported goods will have a 24-hour window.

Post-pandemic as Chinese shoppers are still “cautious” about spending on big-ticket items, Alibaba’s Taobao and Tmall are encouraging consumer spending while driving user growth by offering quality products at competitive pricing.

Livestreaming to rev up spending

Kim Kardashian reportedly sold 15,000 bottles of her fragrance within minutes after collaborating with Taobao’s livestreaming heavyweight Viya Huang. That’s the power of livestreaming in China, a format familiar to almost half of China’s 1.05 billion internet users.

By fusing entertainment with instant shopping livestreaming or live shopping was first introduced by Alibaba during its Single’s Day event in 2016 therein opening up a powerful sales channel. The live commerce market in China grew at a CAGR of over 280% between 2017 and 2020 touching $171 billion (RMB1,217 billion) in 2020, as per McKinsey & Company. A channel that could account for 10-20% of all e-commerce by 2026.

It’s a no-brainer thus that several global brands including Louis Vuitton to IKEA have leveraged livestreaming in China. Joining the bandwagon is Apple which has planned it first-ever livestream session during this 6.18 on Taobao, which accounts for almost 80% of the live shopping market in China.

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