​Allgrey fashion trend, or 格雷系 in Chinese, which involves the layering of items in different shades of grey, was the major fashion fad in the last months of 2023 going into 2024. Originating amidst the winter season, this trend has seen an extraordinary rise in popularity, growing MoM 29.53X on average from November to January and captivating over 300 million views in relevant topics on Red/Xiaohongshu.

In this edition of our micro trend report, we provide a thorough overview of:

• Introduction of the Allgrey Fashion Trend: assessing key characteristics and data of this China fashion trend.
• Demographics: understanding the key regions and age groups engaging with this style.
• Origin and Promotion: how it became a trend.
• Sentiment Analysis: what consumers praise about Allgrey and why it has been widely adopted by the average consumer.
• Social Marketing: the role of influencers and brands in promoting this trend.
• E-Commerce Impact: how brands are leveraging the hype on Tmall.
• Future Prospects: how is Allgrey faring as we enter spring season, and what’s next in China’s ever-evolving fashion?

The analysis is empowered by Doris, WalktheChat In-house A.I. Social Listening Tool.

Remember the red-brown tones of Maillard style that “sizzled” Chinese fashionistas in fall of 2023? As Maillard’s popularity faded and winter’s chills sniffed in, the calm and neutral shades of grey became the new “it color” on Chinese social media such as Red and Douyin.

Using grey tones as the primary base color of an outfit, Allgrey refers to layering of items in grey shades to create a simple yet elegant ensemble.

The Allgrey China fashion trend primarily appeals to the younger audience, especially those between 18-24 years old, who form the largest demographic group, closely followed by the 25-34 age bracket.

Interestingly, despite its association with elegance, only 3% of the Allgrey enthusiasts belong to the 35-44 year age group. This could potentially be attributed to the novelty of the Allgrey style, which might not have yet resonated with the more mature demographic.

Additionally, it’s notable that audiences from Guangdong are leading this trend, surpassing those from traditionally fashion-forward provinces like Shanghai. This shift highlights Guangdong’s emerging significance in shaping contemporary fashion trends.

Allgrey was initially known by generic terms such as “grey color scheme fashion” (灰色系) and “classy grey fashion” (高级灰) before Red platform launched an official #Allgrey campaign, catapulting the Allgrey concept into the limelight.

In addition, Red invited influencers and celebrities to host themed livestreams, further popularizing the trend. This strategic social media push demonstrates the power of digital platforms in shaping fashion trends in China.

The pursuit of an affluent and refined appearance has been a long-standing and growing desire among Chinese consumers. This trend has spurred the popularity of search terms such as “sophisticated fashion” (高级感穿搭) and “Old Money style” (老钱风).

Enter the Allgrey trend, the latest embodiment of quiet luxury in China’s fashion domain. This trend captivates with its minimalist charm and understated luxury, appealing to those who favor sophistication without ostentation. Influencers and fashion enthusiasts laud its intellectual and old-money aesthetic, highlighting its slimming effect and effortless style. This monochromatic movement represents a growing preference towards simplicity and quality in fashion.

Since Allgrey is a color-centric style, it is formulaic and relatively simple to replicate for the average consumer. An “Allgrey look” can be achieved either by donning entirely grey items, or mixing grey essentials with an accent color such as blue or red.

With this layering technique, consumers yearning to look fashionable in the winter can stay warm, and the style is also versatile for commute and casual scenarios.

The ease of implementation, combined with its warmth, versatility, and inherent elegance and minimalism, serves as the cornerstone of the Allgrey style’s widespread adoption among fashion enthusiasts.

The concept of Allgrey, while not widely popular by its specific name in Western circles, has seen the color grey take center stage in the Fall/Winter 2023 fashion scene. Prestigious luxury labels like Miu Miu, Prada, Max Mara, along with designer brands such as The Garment, frequently emerge in conversations about Allgrey on Chinese social platforms.

Influencers are leveraging the prevalence of grey pieces in these runway shows to reinforce the legitimacy and influence of the Allgrey trend within the global fashion landscape.

Miu Miu stands out as one of the most frequently mentioned brands in discussions about the Allgrey trend, thanks to its compatibility with the trend and the burgeoning popularity of #MiuMiuStyle. However, not all outfits categorized under Miu style are from brand Miu Miu. Consumers are also turning to mass market alternatives from COS and Zara to achieve the look.

In the lead-up to the Chinese New Year, the Allgrey trend took a festive turn, with influencers showcasing their stylish Allgrey ensembles paired with vibrant red accessories like socks, bags, and gloves, symbolizing auspiciousness and fashion-forward thinking.

This thematic adaptation stirred considerable buzz, generating 106,300 engagements on Red and amassing views exceeding 41 million on Douyin.

Apparel brand GANNI tapped into the trend by promoting their CNY festive collection in Allgrey styling through a blend of branded content and influencer collaborations. This positioned their Chinese New Year drops as both trendy and culturally relevant.

The hashtag #KoreanVibeAllgreyBoys emerged as the leading topic within the Allgrey trend on Douyin, ,accumulating over 95 million views in total.

The popularity of Allgrey on social media has been equally relevant in e-commerce, with searches for the keyword “allgrey” experiencing a remarkable 274% increase on Tmall during January.

Recognizing this trend, brands like Nike, Mardi Mercredi, and Arket have promptly incorporated the keyword into their product listing titles to harness the search traffic.

What’s the outlook for Allgrey? What will be the next big trend in 2024?

As we transition into spring, the Allgrey fashion trend’s stronghold on China’s fashion scene is showing signs of retreat, with mentions on the social media platform Red plummeting by 66% in February. This suggests that Allgrey may have been a temporary craze, likely to be dethroned by the next emerging fashion style.

Social media platforms like Red and Douyin are at the forefront of inventing new trends, turning viral moments into commercial triumphs through savvy live streaming strategies that drive sales.

Looking ahead, 2024 is expected to bring about fresh, color-based themes, following the success of Dopamine, Maillard and Allgrey in 2023. The secret sauce for any social media-inspired fashion trend to achieve virality seems to rest on its ease of adoption and replication, with straightforward, easily emulated styles gaining traction most swiftly.

WalktheChat is an AI-powered China Marketing Agency supercharged with an industry-leading AIGC and tech team.

: selina.wang@walkthechat.com

Follow us on LinkedIn for more news and insight about China’s digital marketing and luxury landscape.

More reports available upon request.

The post China’s Top Winter Fad: Allgrey Fashion Trend Captivates over 300 Million Views on Red appeared first on WalkTheChat.

The traditional eCommerce channel is slowing down, while the growth of live streaming eCommerce has exceeded expectations:

• Traditional eCommerce revenue grew around 1% and reached 582.6 billion CNY (~87 billion USD), including Tmall (Top 1), JD (Top 2), and Pinduoduo (Top 3).
• Livestreaming eCommerce revenue grew 124% and reached 114.5 billion CNY (~17 billion USD). The ranking is Douyin (Top 1), Kuaishou (Top 2), and Diantao (from Taobao, Top 3).

Due to continuous covid cases and regional lockdown in Q2, online and offline merchants have suffered from consumer shopping desire. However, we can observe new trends and opportunities hidden behind the changes.

In this article, we will summarize:

• JD.com 618 Mid-Year Sale result: transaction volume, growth rate, and uprising categories.
• Douyin 618 Mid-Year Sale result: highlights in sales-driven short videos and live streaming, consumer trends, and TOP 5 best-performing brands.
• Taobao/Tmall 618 Mid-Year Sale result: result, uprising categories, and consumer trends.

JD.com 618 Mid-Year Sale Result

• As of 23:59 on June 18th, Beijing time, JD.com reported a total transaction volume of 379.3 billion CNY (~56.68 USD) for the 2022 JD618 Grand Promotion, which exceeds last year’s 343.8 billion CNY (~51.38 USD). (source: JD official website)
• Although JD.com achieved an increase of 10.32% in total transaction volume, the growth rate is lower than that of the same period last year (43.72%). (source: chyxx)
• Regarding category, home-workout equipment, smart home appliances, and quality household category have experienced positive YoY growth, with an increase of 232%, 123%, and 108% respectively. (source: CBNData)
• In 2021, JD.com experienced a revenge consumption trend that contributed to a YoY growth rate of 43.72. Unfortunately, this trend didn’t appear in 2022. Because of the sporadic covid situation, Chinese consumers tend to be more cautious and rational in their purchasing decision. (source: chyxx)
• During the Double 11 Single’s Day Shopping Festival 2021, JD.com reached a total transaction volume of 341.9 billion CNY. (source: Sohu) So JD.com’s performance was still more robust during the 618 Mid-Year Shopping Festival, which was initially JD’s Anniversary Festival.

We’ve prepared this chart showing JD’s evolvement in total transaction volume during the 618 Mid-Year Shopping Festival from 2017-2022:

Douyin eCommerce 618 Mid-Year Sale Result

Douyin eCommerce has been attracting merchants to open Douyin stores and pushing for in-app conversion. One of the main characteristics of Douyin eCommerce is to leverage Douyin KOL and Douyin Livestreaming.

• During the 618 Mid-Year Shopping Festival in 2022, brands and KOLs held 40.45 million hours of live streaming on Douyin. This is a 58.88% increase compared to Double 11 Single’s Day 2021 (25.46 million hours). (source: Douyin eCommerce official & iiMedia)
• More merchants and brands participated in 618 this year, with a 159% increase compared to last year. (source: Douyin eCommerce official)
• During 618, short videos with shopping carts (directly driving traffic to stores) have been viewed 115 billion times. Douyin has around 650 million monthly active users, so this means Douyin users have watched over 176 sales-driven short videos during this year’s 618 Shopping Festival.
• In terms of geographic location, consumers in Shanghai showed strong purchasing power, ranking them No.1 in total purchasing volume, followed by Beijing, Chongqing, Chengdu, and Guangzhou. (source: Douyin eCommerce official)

Shanghai went through a regional lockdown when online shopping and delivery were interrupted. So, consumers leveraged 618 to vent out the “delayed” shopping desire and store some daily necessities for the future.

• Regarding the buyer persona, Gen-Z has contributed the most to the growth of transactions on Douyin. Gen-Z buyers have spent 164% more compared to the same period last year. Millennials also purchased 117% more in order volume. (source: CBNData)

The TOP 5 best-performing brands in GMV (Gross Merchandising Volume) during Douyin 618 are: 

1. Xiaomi (consumer electronics)
2. Maotai (Chinese liquor)
3. Adidas
4. YA-MAN (Japanese beauty instrument)
5. Angeperle (Chinese pearl company)

The rest of the players in the TOP 10 ranking are all domestic brands. (source: CBNData)

Taobao/Tmall 618 Mid-Year Sale Result

Tmall announced that 618 Mid-Year Shopping Festival GMV (Gross Merchandising Volume) had achieved a “positive growth” without revealing too many details.

• During this year’s 618, over 260k brands and merchants participated in the grand event, a 4% increase from last year’s 250k. (source: CBNData)
• 300 brands have surpassed a transaction volume of over 10 million CNY (~1.49 million USD); 100 products have exceeded the same. We can observe that “hero product” still plays a crucial role in Taobao/Tmall eCommerce, as the best-selling “star” product can contribute a large percentage to the total revenue of a store or brand.
• In terms of geographic location, Shanghai consumers also ranked the highest in total transaction volume, achieving positive growth. Beijing ranked No.2.
• Regarding consumer trends, Gen-Z buyers grew by 30% compared to last year. Categories such as new healthcare, colored contact lenses, and home medical appliances are popular among Gen-Zs. Although still in their youth, Chinese Gen-Zs take good care of themselves, pursuing a prettier look and healthier lifestyle.

Looking for more data about Tmall? Check out this article:

• China’s 618 Mid-Year Shopping Festival 2022 first results: Skincare and Beauty continue to thrive, Fashion slows down

Our observation

In post-covid China, Chinese consumers are more cautious and rational in purchasing decisions. Traditional eCommerce platforms face a severe challenge from live streaming eCommerce such as Douyin. With live streaming going on all year long, people are less excited at traditional major sales festivals because they can also enjoy discounts offered by live streamers.

Building a solid brand positioning to grow and sustainably thrive in China is more important than ever. Being on Chinese consumer’s top of mind in your niche vertical is the prerequisite for success.

The post China’s 618 Mid-Year Sale Results: Live streaming eCommerce Revenue Grows by 124% appeared first on WalkTheChat.

In this article, we will look at:

• What is the 618 Mid-Year Shopping Festival?
• When to start preparing for the 618 Mid-Year Shopping Festival?
• What are the promising categories for China judging from the pre-sale performance?
• How are the foreign and domestic brands performing this year during pre-sale?

What is the 618 Mid-Year Shopping Festival?

618 is one of the major shopping festivals in China. Chinese eCommerce platform JD.com first initiated it as Aniversary Day, offering a series of promotions and discounts. Then other eCommerce players such as Alibaba-run Taobao/Tmall, Pinduoduo, Suning also joined the battle.

Nowadays, Chinese social media like Douyin (the Chinese Tiktok), Red, WeChat, and Weibo are actively participating in 618 with social eCommerce, helping brands and merchants to drive awareness and sales. Offline retailers also see 618 as an important sales opportunity.

When to start preparing for the 618 Mid-Year Shopping Festival?

Same as the Double 11 Singles Day Shopping Festival, 618 Mid-Year Sales also consist of Pre-warm, Pre-sale, and Peak (the big days when the official events happen).

For significant shopping festivals like 618 or Double 11, the seeding preparation can date back to two months ago. Besides preparing enough stock in advance, brands also need to plan their marketing strategy ahead of the event.

Take Red/Xiaohongshu as an example: April is an important month when brands start to invest in much more KOLs to test the content quality and broaden the seeding audience. In May, as the pre-sale period is approaching, brands need to focus more on KOLs with higher follower stickiness and conversion capacity. In the end, brands will see the seeding results in June – the big day.

Here is a timeline and strategy overview of leveraging Red starting from the pre-618 seeding period to drive awareness, traffic, and sales for the Big Day.

How are the brands performing this year?

This year, JD.com started pre-sale on May 23rd. Meanwhile, Taobao/Tmall began on May 26th.

During Pre-sale, consumers can already compare prices across different platforms, add to carts, and pre-order their desired products. The pre-sale period can help brands and merchants estimate the actual sales on the bid day. So we can have a rough estimation of the brand’s 618 performance according to their pre-sale performance.

Best performing categories for 618 Mid-Year Sale 2022 (Pre-sale)

In terms of GMV (Gross Merchading Value), categories with high AOV (Average Order Value), such as Consumer Electronics, Beauty, and skincare, continued to shine. Other verticals also showed strong potential, reaching an estimated GMV of 10 million RMB (~1.5 million USD) to 100 million RMB (~15 million USD). These promising categories are maternity & baby, food & health care, home decor & household items, and sports & outdoors items.

According to data from Digital Retail Data Provider Nint 任拓, during the first 4 hours of the pre-sale (May 26th, 20:00-24:00), some leading brands were already estimated to reach a GMV (Gross Merchandising Value) of over 100 million RMB (~15 million USD). These top-performing brands are beauty and skincare, home appliances, skincare and body care equipment, sports shoes, etc.

This trend shows that Chinese consumers are increasingly looking for self-satisfaction. Instead of buying to show off or for other social value, Chinese people value how their purchases can bring a positive and healthy impact and better quality of their personal life.

Poor performing categories for the 618 Mid-Year Sale 2022 (Pre-sale)

However, brands from the general fashion apparel category have been less lucky. According to the same source, menswear and underwear categories showed a decreasing trend compared to last year. The poor performance is also due to minor outbreaks of covid in a few Chinese cities everyone now and then, which reduced people’s needs for outings and thus for fashion items.

Best performing brands for 618 Mid-Year Sale 2022 (estimated)

According to Nint 任拓 and eBrun, here is a list of the top-performing brands by category during the first 4 hours of the pre-sale (May 26th, 20:00-24:00) on Tmall.

Beauty and skincare Top 10

Foreign brands still dominate the best performing ranking in the beauty and skincare categories. Only two Chinese brands managed to be on the list:

1. Estée Lauder
2. L’Oréal
3. Lancôme
4. Olay
5. Proya (珀莱雅)
6. La Mer
7. Shiseido
8. SkinCeuticals
9. Helena Rubinstein
10. WilNONA (薇诺娜)

Makeup and Perfume Top 10

The best-selling ranking for the makeup and perfume category has changed a lot this year. The estimated sales of make up forever and MAC in the first 4 hours are above 50 million RMB (~7.5 million USD), surpassing Saint Laurent to rank in Top 1 and Top 2.

COLOR KEY, Givenchy, and Maybelline were on the Top 10 last year, but this year they are replaced by NARS, make up for ever, and Lancome. Chinese beauty brand Florasis still holds the Top 10 position.

1. Make up for ever
2. MAC
3. Saint Laurent
4. 3CE
5. Estée Lauder
6. Armani
7. Lancôme
8. Blank Me
9. Florasis (花西子)

Tmall 618 Women Fashion Top 5

Brands that used to be on the list, such as Uniqlo, have disappeared. This year, Chinese brands dominate the top-performing list for women’s apparel. Mo&Co. could be the only women’s fashion brand listed among Top 10 this year:

1. Mo&Co.
2. Ochirly (欧时力)
3. Eifini (伊芙利)
4. Jorya (卓雅)
5. 独束

Tmall 618 Sportswear and Casualwear brand Top 10

Foreign brands still dominate the top-performing list for sportswear and casual wear. DESCENTE, a sports brand focusing on ski items, got popular leveraging the hot topics during the 2022 Winter Olympics held in Beijing.

1. DESCENTE
2. FILA
3. Nike
4. Adidas
5. Under Armour
6. Li Ning (李宁)
7. Anta (安踏)
8. Jordan
9. Lululemon
10. LORNA JANE

Tmall 618 Bags, luggages and leather goods Top 10

1. Coach
2. MK
3. songmont
4. TORY BURCH
5. MCM
6. Warmstudio (木良吉吉)
7. bromen bags (不莱玫)
8. Grotto (个乐)
9. FURLA
10. Peco

Tmall 618 Healthy food, diatery supplements Top 10

The ranking for health products and dietary supplements is dominated by foreign brands, except BY-Health, a well-established Chinese supplement brand.

1. Swisse
2. BY-Health 汤臣倍健
3. Blackmores
4. Movefree
5. WHC
6. life space
7. Noromega
8. Nestle
9. Youthit
10. Keylid 健力多 (by BY-Health Group)

Please note that these rankings are based on the estimated sales of Tmall brands during the statistical period (the total amount of “deposit + final payment” in the pre-sale period). Please understand that there may be some discrepancies with the actual sales. (Data source: Nint 任拓)

We will keep on eye on how the situation evolves during the 618 Mid Year Shopping Festival.

Read on here to learn more about our observations on the past 618 Mid Year Shipping Festivals:

• JD.com 618 Revenues Grow 33% Amid COVID-19 Pandemic
• 618 Sales Data 2019: Tmall growth slows down; Pinduoduo traffic up 48%

The post China’s 618 Mid-Year Shopping Festival 2022 first results: Skincare and Beauty continue to thrive, Fashion slows down appeared first on WalkTheChat.

• A brief introduction about Chinese eCommerce giant and Double 11
• Why is Tmall Double 11 sales growth slowing down?
• Is Tmall still a good option to sell in China?
• How should your brand react to the ever-changing Chinese digital ecosystem?

Want to get started on Tmall? WalktheChat is an official Tmall Partner for both Tmall Global, Tmall Classic, and offers synchronization services between Tmall and Shopify.

Chinese eCommerce giant Tmall and Double 11

The record-breaking sensational shopping festival

Tmall first initiated the Double 11 Single’s Day Shopping Festival in 2009. Over the years, it has evolved into a national shopping phenomenon that affects the global retail industry.

On November 11th, 2012, the one-day sales of Double 11 surpassed Cyber Monday in the United States. It has been officially the world’s largest Internet Shopping Festival. The battlefield of Double 11 further extends to December, which is named Double 12.

Tmall throws a nationwide festival with huge discounts, celebrity shows, evening galas, and endless live streaming sessions every year. Other players such as JD.com and Pinduoduo also try their best to create a heated shopping atmosphere.

Double 11 entered a new phase since 2020

In 2020, during the COVID-19 pandemic, Tmall announced that the Double 11 would have two sales windows. The first sales window will be November 1 to 3, and the second one will be on November 11th. For the first time, Tmall extended the official sales days from 24 hours to 4 full days, marking the start of a new era for Double 11 (this strategy was extended in 2021).

The idea of extending official sales days was to give consumers more days to consider and finalize their purchases. Double 11 again hit a historical high of 540.3 billion CNY (~84.5 billion USD) 290,000 brands participating in Tmall. However, several details should draw our attention here:

• The 86% YoY growth in 2020 looked promising, but we are comparing 4-day sales with 24 hours sales.
• In 2021, Tmall ended up obtaining only an 8% YoY growth. Attracting consumers’ attention by evening galas and entertainment has lost its appeal. After reaching this tremendous sales number, it is clear that the Double 11 shopping festival has slowed down in growth. It is also likely to stay a single-digit growth for a while.
• Consumers are used to comparing prices cross-platform. Tmall is still the number 1 eCommerce platform in the Chinese eCommerce ecosystem. However, it’s facing challenges from other platforms: JD.com is strong in consumer electronics and domestic appliances; PDD (Pinduoduo) is famous for offering low prices, although consumers also expect a lower quality from PDD merchants.

Why is the growth of Double 11 sales in China slowing down?

While Tmall sales growth decreased dramatically, Alibaba’s competitor JD.com registered a YoY growth of 28.6%, better than Tmall but slower than the 33% growth from 2019 to 2020. The Double 11 growth slow down is a common phenomenon among conventional eCommerce platforms. Let’s deep dive into the reasons why it is happening.  

Consumer fatigue towards Double 11

The Double 11 has been around for more than a decade, and it was only a matter of time before consumers started to lose interest. The Chinese digital ecosystem went through tremendous progress over the years. Customers are familiar with digital innovations offered by platforms and brands, so they are not as excited by novelty as they used to be. 

Longer sales window diluted the urgency to buy

In 2021, Double 11 started with pre-sale in late October, making it a long “battle” of 10 to 20 days. Many consumers already bought what they wanted in phase 1 and soon lost interest. Two sales windows mark the original date of this event – Nov. 11th – look weaker and softer than before. 

Live-streamings sales attract users’ attention 

Live streaming e-commerce brings consumers a more intuitive, vivid, and engaging shopping experience than static environments. It usually brings sound marketing effects and high conversion rates. As a result, it has become a new growth driver for the e-commerce industry. For example, during Double 11 2021, 39% of consumers bought during live streaming e-commerce, making it the second-largest sales channel.

Live streaming sale is no longer the exclusive weapon of eCommerce platforms such as Taobao/Tmall. Instead, social media such as Douyin, Kuaishou, WeChat, and Red also enabled live-streaming capacity, trying to capture users’ limited attention. Nowadays, Chinese people now enjoy a great variety of options to entertain themselves with live streamings, talk shows, etc., so that it’s harder for Tmall to create an even more engaging “festival” atmosphere as it used to. 

For example, Chinese skincare brand Herborist delivered the most engaging live streaming sales during Double 11. In this session, live streamers and actors dressed up as characters from Chinese historical dramas. They leveraged the historical context to amuse the audience and strengthened Herborist’s positioning as a trustworthy Chinese brand. Moreover, they used the play’s plot to encourage consumers to purchase. Although not led by top live streamers, Herborist captured users’ attention and became a hot topic on Chinese social media. 

Promotions all year round dilutes people’s purchasing power 

There are several promotions across the year, with heavy discounts, and 11/11 stands out less than it used to. Top live streamers such as Austin Li and Viya can convert a random day into a sales festival. Although they are incredibly picky in selecting the brands to collaborate with, many big names still try hard to get exposed in their live stream in exchange for millions worth of transactions. Such revenue often comes with a cost: brands have to provide the lowest price in the market to get exposure. Even the first-tier international brands such as L’Oreal and Lancôme also have to offer the lowest price for a certain period. 

Hundreds of live streamings offer promotions such as “buy 1 get 5” all year round, increasing consumers’ excitement threshold. As a result, Chinese consumers no longer buy for simply a “50% off” during Double 11.

Introspection on consumerism, rational and sustainable shopping

After reaching a tremendous number with decades of two-digit growth, the Chinese economy and market are calming down. Many consumers are getting more reflective and are making rational and logical shopping decisions. Chinese consumers are pursuing not only “what to buy” but also “for whom” and “sustainable shopping”. They tend to purchase after doing proper research of the brand and product. The importance of pre-sale research also led to the rise of the UGC (user-generated content) community and social commerce platforms such as Red / Xiaohongshu.

If you are interested in Red, click here to learn more about Red marketing and advertising.

Should your brand still consider Tmall to drive sales in China?

Tmall remains the number 1 eCommerce platform in China 

Although there are concerns about the future of Double 11, Tmall is still the number 1 eCommerce marketplace in China. In terms of market share, in 2021 Q3, Tmall’s total turnover increased by 12.9% over the same period last year, occupying 64.2% of the market, ranking first. JD’s total transaction volume increased by 24.7% compared to the previous year and reached a market share of 28.5%, ranking second. Although JD.com is growing faster than Tmall, it is still not strong enough to challenge Tmall’s leading position. 

Tmall and Taobao have the most qualified users ready to purchase

It’s common for Chinese consumers to compare prices across various eCommerce platforms and then decide where to buy, considering the price and services. However, among top retail eCommerce platforms, Taobao and Tmall still have the highest percentage of users who entered the payment page During Double 11. This number suggests that Taobao and Tmall probably offer better conversion strategies, promotional activities, or customer service to stand out from the competition. 

Choose the best-fit eCommerce platform for your vertical 

For foreign brands who want to enter China, Tmall is still the first option for you to reach millions of active shoppers. Especially for verticals such as fashion, luxury, skincare, beauty, mom&baby, etc, we still recommend you to sell on Tmall. Most consumers will get inspired on social platforms such as Red or WeChat, and then finalize the purchase on Tmall. 

More questions about selling on Tmall? 

If there are still unanswered questions about selling your product on Tmall or other social platforms, feel free to reach out to us for a customized approach.

Tmall advertising enables to drive traffic and sales 

Another reason is that Tmall offers a variety of in-platform paid marketing and advertising tools. You can drive traffic to your store and boost sales by paid methods. Usually, you’ll need a Tmall Partner (TP) agency to manage the store and optimize your performance.

If you want to know more about Tmall advertising, we have a complete guide for you.

In case you are wondering how to select a Tmall Partner that works well? Please see this article for detailed information.

Tmall is embracing social responsibility and sustainability 

Tmall quickly adapted to the new consumer trends and is leading the recent “sustainable shopping” trend. In response to people’s increasing pursuit for a healthy lifestyle, Tmall changed the official start time to 8 pm instead of midnight, so consumers won’t need to stay up late. Then, reacting to customer’s desire for life quality, Tmall changed its Double 11 slogan to “Expect a Better Life Together (美好生活，共同向往)”, showing its humanistic care for consumers. 

In response to the government’s efforts for social equality and reduced carbon emissions, Tmall also encouraged sustainable shopping and inclusiveness instead of promoting pure discounts. “Green” Lifestyle, Eco-Friendly Consumption was the top priority for this Double 11. Tmall is taking action to promote “green” lifestyles this Double 11 by featuring a dedicated vertical to showcase energy-efficient and low-impact products. Tmall also issued RMB100 million worth of “green” vouchers to incentivize shopping decisions that contribute to an environmentally-friendly lifestyle. 

How should your brand react to new consuming trends in the Chinese market?

The answer is: adapt to the Chinese market for short-term results but keep your brand value as a long-term vision.

Leverage new booming trends in China with Douyin and live streaming

In 2021, traditional eCommerce platforms are already saturated. New social platforms such as Douyin and shopping channels like live streaming are the only ones with significant growth During Double 11.

According to a customer survey covering 1000 buyers conducted by Kantar China, 18% of the consumers purchased on Douyin during Double 11, increasing by 5 points compared to last year (13%). Although the percentage is still low, Douyin is the only platform where we observe such a positive trend. The traditional eCommerce platforms such as Tmall, Taobao, and JD still occupy the first three positions in market penetration. However, the mentioned rate of these conventional platforms has dropped compared to the previous Double 11. 

Live streaming sales also managed to capture users’ attention in the most competitive battle of Double 11. It has surpassed desktop and grown to become the 2nd largest shopping channel during Double 11. However, sales-driven live streaming almost always has to offer huge discounts and promotions. We recommend brands leverage live streaming to reach a short-term peak, but it is not a long-term strategy. As long as the top hosts continue offering heavy discounts in their live streams, live streams will still be linked to low prices.

*Mobile and other Apps means static interfaces, excluding live-streamings

*Live-streamings include all live streaming sales conducted by eCommerce platforms and social media, such as Taobao, Douyin, WeChat, etc…

Optimize your brand’s performance in China with localization 

An increasing number of consumers are showing affection towards Chinese brands. Such a trend is called Guochao, literally meaning Chinese trend. For example, among the brands that entered the TOP20 list of cosmetics transactions on Tmall, domestic products accounted for half of them in the past three years. In 2020, Perfect Diary (完美日记) and Florasis (花西子) emerged as the success story of C-beauty. For the first time, the market share of these two local Chinese brands surpassed international brands.

Foreign brands are facing fierce competition from the local Chinese brands. Therefore, it is vital to offer an online shopping experience adapted to Chinese customers’ habits, including WeChat Pay or Alipay, customer service with instant replies, and others. 

Foreign brands also have to pay attention to Chinese consumers’ patriotism and cultural preference. For example, the boycott against BCI (Better Cotton Initiative) has damaged people’s good feelings towards many big international names such as Nike, Zara, H&M, and negatively impacted the sales. As a result, H&M had to close down 20 offline stores in China, and Tmall banned the brand’s flagship store.

Brand value is the foundation

In 2021, the number 1 reason Chinese customers decide to purchase a brand or product during Double 11 is because “it’s the brand they have been buying”. The survey shows that 68% of consumers admitted that familiarity and trust in a brand play an essential role in purchasing decisions. This driver is getting increasingly important over the years (up 18 points compared to 2020).

In comparison, “brands that I always pay attention to but haven’t tried due to high price” (38%) and “products that I was recommended in other channels” (36%) are the 2nd and 3rd reasons that people decide to buy, but have decreased in importance compared to 2020.

Double 11, in the end, is a conversion-oriented shopping festival. It’s a test or a reflection of how well your brand is rooted in Chinese consumers’ minds. Chinese consumers are becoming increasingly self-aware and prudent. They will keep supporting the brands that can understand their needs, respond to their concerns and resonate with their values.

Therefore, brands should keep investing in image building, storytelling and stay strong in their positioning. It is also crucial to engage with followers and try to be on their top of mind. In a word, try to maintain healthy daily sales instead of relying too much on shopping festivals.

Conclusion

Chinese e-commerce giants created online shopping festivals such as Double 11 to generate booming sales through discounts. However, they were not created with brands in mind.

As consumers are becoming less sensitive to promotions, these massive shopping extravaganzas are losing traction. It is the right moment for companies to reclaim the value of brand-building through investment in thoughtful campaigns and daily engagement with followers and consumers.

Only brands that stay true to their value, close to consumers, and strong in their positioning will triumph in the most competitive sales seasons.

The post Tmall Double 11 revenue slows down – How to react appeared first on WalkTheChat.

In this article, we will introduce：

• The major Tmall advertising formats
• How to create a strategy for each type of Tmall advertising
• What is a good ROI for Tmall advertising
• How to create a Tmall advertising spending plan in 3 simple steps
• How to find out how your competitors’ ads are performing  

What are the different Tmall advertising channels?

Zhitongche 直通车

Website: https://subway.simba.tmall.hk/

Zhitongche is the key-word search ad on Tmall. The ads will show up if a user searched for the paid keyword. The ads will rank according to the bidding amount.

Zhitongche is one of the most cost-efficient ads to target consumers with specific purchase intent. This ad format can help you get a desirable search ranking. Top-selling flagship stores usually allocate 25% to 40% of their budget on Zhitongche. It also works well for brands with limited organic search traffic, commodity, and flagship brand with many fake resellers. 

Most of the Zhitongche campaign is cost-per-click based. This means you won’t be charged unless users click on the ads.

Zhitongche targeting option

Targeting option Zhitongche offers include:

• Retargeting users who have visited or take an action in your Tmall store
• User’s search and purchasing behavior 
• User demographics 
• User groups with special interest (a specific holiday, specific type of interest)    
• Flexible spending schedule/bidding rate based on time of the day
• Campaign creatives for each product

Note you won’t be able to upload your user database to the Tmall backend. However you could create look-a-like audience based on an existing user group. 

How to select keywords for Zhitongche? 

Always bid on the brand name, since this is usually the keyword with the highest sales conversion. For other keywords, you can monitor the competitor’s product search keywords to get inspiration. 

The 3rd party tool SYCM 生意参谋 offers the opinion to monitor a competitor’s product’s top-performing keyword.

For example, this is Pandora’s hero product, with monthly sales of 2.5 million RMB (290k USD).  

Here we can find the top keywords that are driving traffic to this product. For example, “CK ring” and “DW ring” are among the top 10 keywords that brought search traffic for this product. And “ring high-end elegant” and “dw ring” are among the top keywords that have the highest sales conversion. 

You can monitor closely similar products from a competitor’s stores to create test campaigns. Note it’s best to cross-check the competitors that are close to your brand’s sales volume. Top sellers on Tmall may have a much higher marketing budget for bidding on the hot keywords. It’s important to balance out the keyword relevance and cost.  

For product selection, usually, it’s best to allocate most of the keyword search budget to the top 3 hero products. Sales of a flagship store usually concentrate on the top hero product, which is also the key product that could drive traffic to your store. 

品销宝 Pinxiaobao

Website: https://branding.taobao.com/

Pinxiaobao is another keyword search ad, with the highest search ranking. It’s only available for Tmall flagship stores. Thus the best Tmall advertising channel to standout against fake sellers and distributors.

Pinxiaobao ROI could be extremely high. With some brands, we reached an ROI of 14 during the Double 12 sales festival. 

Pinxiaobao only let brands target keyword containing their brand name. Depending on the search volume of your brand, the cost to purchase this keyword is different. For example, the keyword “Chomel”, a Singapore jewelry brand, costs around 1,200 RMB per day, the daily search volume of “Chomel” is around 6,000 per day. For larger brands, the keyword will be more expensive. 

Tmall also offers a whole-year deal to purchase 100% appearance of your brand’s name with a discount. The brand can launch a couple of test campaign to decide if it makes sense to purchase the yearly deal. 

超级推荐 Super recommendation

Website: https://tuijian.taobao.com/

超级推荐 Super Recommendation ad is the core advertising product Taobao promotes. It’s an algorithm driven system that pushes potential relevant products to users based on their in-app actions. 

According to the podcast Fengtouquan, Taobao’s content-driven traffic (user browsing the App without a clear purchasing goal) has increased to 50%, compared to the traditional key-word-search traffic. And Super Recommendation is the key advertising product that targeting those consumers who don’t have a clear purchasing intention.  

The ad placements are spread around different parts of Taobao. 

You should have a different ads strategy for each ad placement. 

Super Recommendation on the Taobao homepage

The most visible ad placement is on the homepage, appearing after the first scroll. 

This is Taobao’s main newsfeed. Some users spend a lot of time scrolling through the feed for window shopping. Users who browse through the product recomendation fee usually have small purchasing intent and a stronger need for entertainment. 

The cost for “add to cart” from the homepage Super Recommendation is cheaper since users like to add products to their cart while browsing. But the conversion from cart to check out is usually a lot lower compared to key-word search ads. 

On the product recommendation feed, your ad will appear alongside other products in all kinds of categories. Lots of users are seeing your brand for the first time. Thus the goal is not for users to buy your product, it’s to encourage users to click on your ad, enter your store, and start browsing other products in your store.  

This will increase the traffic within your store thus ultimately increase the store ranking and sales. 

The product you push forward under Super Recommendation should not be just the hero product. You should test a different style of product to find the product that maximizes the click-through rate. For the brand with a generic hero product, they can try pushing a more unique style in order to stand out. 

Super Recommendation on the order status page

The Super Recommendation that appears after order status, especially on the payment confirmation page, follows a different strategy.

Here users just made a purchase of another product, and their purchasing intention is stronger. For this ad placement, it’s best to push the product with the highest conversion rate. A lot of times this is also not the hero product.

Companies with lower brand awareness could spend a larger proportion of their budget on Super Recommendation ads to increase the traffic to their store. A larger brand can use the newsfeed to increase marketing touchpoints with users and target sales conversions. 

智钻 Zhizuan

Website: https://zuanshi.taobao.com/

Zhizuan is the banner ad that appears on the Taobao homepage. It is the most expensive ad format on Taobao. The Zhizuan ads usually appear on a holiday promotion landing page. They are visible, bigger, and a lot more expensive. 

Medium-size brands can choose to invest in Zhizuan during the Tmall promotion periods. For example, MISSOMA spent around 16% of their budget on Zhizuan during Double 12, while spending less than 1% during regular sales periods. 

Tmall ususally reward free promotion space for KA brands such as Pandora (NO.1 in Jewelry) and Bauerfeind (No.1 in knee support). It’s possible some top-ranking brands don’t need to spend as much on Zhizuan. 

聚划算 Juhuasuan 

Juhuasuan is a flash-sale channel. The ad placement is on top of Taobao’s home screen. It’s one of the largest traffic pool within Taobao. 

Many brands will compete to signup for 1 ad placement in Juhuasuan. The Taobao team will choose the brand with the best potential to bring the largest GMV for the placement. Thus brands usually will need to offer a deep discount in order to be selected. Thus participating in Juhuasuan flash sales is not always profitable for brands. 

Why do most brands still participate? 

• Brands could use Juhuasuan as a channel to promote their hero product and increase sales. One of the major Tmall tactics is to create a hero product, which is typically a product with a low margin, lower price point, but is the key traffic driver for the whole store. Kinda like the top ranking page on your website, or the “IT” product. 
• Juhuasuan is also a channel for inventory clearance
• Generate traffic for other products within the store that have a higher profit margin 
• Generate traffic for a retargeting campaign  
• Kick-off a new store or re-activate an underperforming store 

For brands, monitoring the medium-term impact of Juhuasuan flash sales and calculating the overall profit and loss will help to define the right long-term strategy. 

淘宝客 Taobao Affiliate Marketing 

Website: https://ad.alimama.com/

Taobao Affiliate Marketing enables setting up commissions reward for individual users or 3rd party platforms that promote the brand. It’s the best tool to use to drive traffic from outside of the Taobao ecosystem. 

For example, this is the platform used to create 淘口令 for influencers. Tmall will automatically calculate the commission and share it with the influencer. It also enables brands to generate shopping cart links on Douyin/TikTok 

The minimal commission from the store is 3%.

The platform also has category-specific events that the brand could signup for in order to push the brand among group-buy leaders.

Brands with higher margins, and require trust to make a purchase usually do well with affiliate marketing. For example, skincare, health supplement, and mother & baby product usually spend a larger amount of marketing budget on Taobao Affiliate Marketing. 

How to create a Tmall advertising strategy in 3 simple steps? 

Tmall’s advertising system is very complicated. It has 16 advertising channels and probably will add more in the future. Each advertising channel has a separate top-up system. This means once you top-up the budget in one channel, you cannot move it to another channel. 

At the same time, the strategy during a sales holiday will be very different compared to on a regular day. So is the strategy for each industry and each sales level. 

How to build a budget allocation plan without all-in on test campaigns on every channel?  

You could follow the 3 simple steps:

1. Analyze the spending plan of the top-performing stores, and close competitors in your industry
2. Create test campaigns based on these results
3. Optimize and create your own spending plan

The simplest way to create an initial plan is to look at how your competitors are spending their budget.

The Tmall App store has many 3rd party tools for monitoring competitor’s performance. The tool that we use at WalktheChat is called SYCM (生意参谋). It offers a competitor listening service that enables you to monitor the marketing spending and performance of 5 stores and 10 products for a fee of 1,188RMB per year.

You can find the list of the top 100 best ranking Taobao/Tmall stores (either by traffic or by sales transaction) in your industry using this link: https://sycm.taobao.com/mc/mq/market_rank

For example, Pandora was the NO.1 performing jewellery store on Taobao/Tmall during the Double 12 campaign.  

With the competitor listening tool, we could graph Pandora’s spending distribution during December 13th (regular period) and December 12th (a promotion holiday Double 12). Note the data given is an index, not the actual spending budget.

Pandora’s spending index during a sales holiday of Double 12 was up by 44% compared to a non-sales day. The advertising channel that has the strongest surge was Juhuasuan (聚划算), the flash-sale channel. 

Now you can check the strategy of your direct competitor that has a similar sales target.

MISSOMA is a premium jewelry brand that just opened its Tmall store in July 2020. They achieved 2 million RMB sales result during the 2nd month of launching on Tmall, mainly by investing in WeChat and Little Red Book influencers. They are a good account to benchmark against if you are operating a new jewelry Tmall store.

According to SYCM, here is their spending index:

MISSOMA spends most of the paid traffic on key-word search ads and product recommendations. It shifted 16% of its budget towards 智钻 Zhizuan (homepage ads) during the sales promotion period.

This strategy can help you decide how to properly allocate budget between all the Tmall advertising channels.

The major drawback of this strategy is we can only look back on past data. Brands should clearly understand the ranking of each Tmall promotion in order to better allocate budget throughout the year. The easiest way to see the competitor’s future spending plan is to acquire this information from Dingding group. The Tmall operation team usually creates groups of brands from the same industry and all the brands are required to share their promotion budget in a shared file.

What is a good ROI for Tmall ads? 

The main purpose of Tmall ads is to generate sales. Thus the return on investment of Tmall ads should be positive, taking into account the cost of goods and operation costs.

Each advertising channels enable to benchmark ROI with other stores. For example, you can check the average ROI of similar stores keyword search advertising (Zhitongchen) on the Qianniu (千牛) App.

ROI can vary widely between stores. For instance, ROI in the jewellery category varies between 1 to 14, depending on the stores, during Q4 2020.

When an ad campaign is performing well, Taobao’s algorithm will allocate additional traffic to reward good sales performance. There is a clear correlation between the ROI of the ads and the additional “free” traffic from Taobao.

In the example below, when the ROI of advertising was above 8, Taobao pushed around 10k organic daily impressions to the brand products. But when ROI fell around 1, Taobao only allocated 2k of daily free impressions.

Conclusion

The right Tmall advertising strategy can help a brand to gain traction. Brands can benchmark the strategy of competitors in order to create a quick budget allocation, then adjust and optimize different advertising formats over time.

The post Tmall advertising – A step by step guide appeared first on WalkTheChat.