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It’s the Godzilla of sales. 800 million consumers took part. More than a quarter of a million brands participated. Alibaba’s own logistics network – Cainiao – processed 2.32 billion delivery orders. At the apex of the event, 538,000 orders were generated every second.
It’s easy to get lost in the stats. But if you look beyond the hype, you can clearly see the future of retail within the 11.11 Festival.
Yes, it’s online. That’s obvious. But it’s the omnipresence of e-commerce, and how it is delivered – from the format in the first place to the last mile to the customer – that is truly fascinating.
For starters, you need to understand that China has the highest e-commerce penetration in the world at 25 per cent of retail (according to Joe Tsai, executive vice chairman of the Alibaba Group). That’s at least ten percentage points above our part of the world. Secondly, e-comm is seamlessly integrated into the two largest online ecosystems – Alibaba and JD.com – so search, social, commerce, logistics and payments all work together in a way they just don’t in the West.
That extends through to physical stores in what Alibaba calls “New Retail”, although bricks-and-mortar us becoming less and less relevant. Joe Tsai says businesses, because of Covid, will “have to deal with what happens when nobody comes into your stores…and the answer to that is digitisation”.
Beyond the bones of online, e-comm is not just passive retail; it’s interactive entertainment and sport in China, particularly during 11.11. Mini-games were baked into apps for the Festival to keep consumers engaged, with the reward being “red packets” or discount coupons to spend on the event. Abacus described one consumer spending “four to five hours every day feeding and dressing up a virtual cat on her smartphone” in search of an 11.11 shopping incentive. Kinda scary.
Livestreaming elevated the entertainment aspect of the Festival and is definitely the direction for online commerce. This is like the old-school TV shopping channel on speed. During 11.11, 400 company executives and 300 celebrities (known as Key Online Influencers or KOLs) hosted their own individual online livestreamed shopping events on Taobao Live, Alibaba’s dedicated livestreaming channel. During the livestreams, shoppers could ask questions, interact with the presenters and of course, buy. One of the quirkier livestreams was with ex-NBA basketball legend Magic Johnson, who hosted a 20-minute show live from L.A. for Uncle Bud’s – which manufactures hemps and CBD topicals and lotions.
This year, brands could even continue their livestreams 24/7 utilising Alibaba’s automated “virtual anchors”, powered by artificial intelligence. Alibaba commented that ‘virtual anchors can not only understand and respond to the audience’s questions, but they can also greet the audience and “perform sophisticated dancing steps”.’
11.11 also showed the future in how goods were delivered. While getting $100 billion in orders to customers involved 3 million people and 3,000 charter flights and ships, it also was highly automated. One thousand robots in one of the world’s most intelligent warehouses dispatched product, and Alibaba even tested a fleet of 22 “autonomous logistics robots” to deliver products on campus at Zhejiang University.
The 11.11 Global Shopping Festival is equal parts mesmerising and terrifying – and I experienced that first-hand in Shanghai two years ago. But for Australian and NZ vendors and retailers, it’s where e-commerce is headed and the lessons learned should be applied to our own markets. As science fiction author William Gibson once said, “the future is already here…it’s just not very evenly distributed.”
P.S. Why “Singles’ Day”* in the first place? The day started in the early 1990s on Chinese college campuses as a celebration for singles (when written numerically, 11/11 looks like “bare sticks,” which is an expression for those not in a relationship), Alibaba co-opted the idea in 2009 and turned it originally into a one-day price-off promotion all about self-gifting. And from there, the world’s largest shopping event took off.