Singles Day 2019 ended strong with 268 Billion RMB (U$38 Billion) gross merchandise value (GMV). Once again, a new record has been set and it’s 27% higher than last year’s event.
Many analysts have been quite pessimistic about this year’s growth considering that it has slowed down in recent years and especially because of the China-US trade war. So this year’s increase in growth came as quite a surprise.
But this increase in growth came at a price. Tmall put in significant investments to make this year’s Singles Day even bigger and stores had to put in extra work achieve that growth rate.
The old “screen real estate” game focused on optimizing search and conversion is no longer enough. Stores had to do a lot more: partner with KOLs, bring in additional traffic from Douyin, give bigger discounts, offer more free gifts, sell through live streams, lottery style giveaways, offline live events, or all of the above. That’s without reducing budget on in-platform advertising (CPC, CPM).
While we can’t say for sure if most stores were able to achieve 27% growth, here’s what happened to the stores we operate.
We run stores spanning across several categories that are completely unrelated. Many of these stores were participating in their first ever Singles Day, going up against brands that have already established a strong presence in China over the years.
Most stores were within a few percentage points of their sales targets, which were based on a growth rate very close to this the platform’s actual growth. Some stores did overwhelmingly well, going 50% above an already optimistic target for Singles Day.
We also had two instances of decline in sales this year. One of the stores ended up losing platform support for Singles Day because the brand decided to expand to other ecommerce platforms. While such a decision might fit into a larger brand strategy, the impact on Tmall sales is undeniably catastrophic.
Another store saw a 28% decline due to a significant reduction in marketing budget for basic in-platform advertising. While optimizing paid ads is no longer as attractive as it once as, it’s still a crucial component and we saw that it could be the deciding factor for declining sales in a growing market.
Overall the results fall in line with the platform’s overall growth. Stores do need to be more creative and diligent than before in earning traffic, but we learned that the basic rules of the game have not changed. You cannot replace the foundation of running a Tmall store.