Is there still room for Alibaba’s 12.12 in the e-commerce market?
Following the success of the Singles' Day, Alibaba has ventured on another e-commerce event dubbed as 12.12, first introduced in 2013. The company has taken advantage of these shopping festivals to push its online presence amidst a strong competition within the e-commerce market.
- The online market has become saturated with more sales created by various e-commerce platforms
- Double 12 targets small and micro merchants as part of its “social or community commerce”, including offline and online sellers
- More than 49 million Alipay global users participated in the event
Just a month after its Singles’ Day event, Alibaba held another consumer-driven shopping festivity known as 12.12 or Double 12. The three-day shopping extravaganza from 10th to 12th December, which started in 2013, is operated on Alibaba’s Taobao consumer-to-consumer retail platform. It caters to small and micro online vendors selling niche products, who were unable to participate during Singles’ Day due to their lack of capability to compete with major brands particularly in terms of offering discounts and processing a huge volume of orders.
However, other players like Tencent’s JD.com came up with their own version of the shopping frenzy day every November, which tightened the competition in China’s e-commerce market. As a result, Alibaba expanded the Double 12 event by also offering discounts on larger brands such as Nike and Uniqlo in its Tmall business-to-consumer marketplace in 2015.
Online shopping festivals like Singles’ Day and Cyber Monday have made the internet market more saturated. To counter the effect of this saturation, Alibaba has taken its Double 12 discounts offline. This year, more than 70,000 international physical stores from 16 countries and regions took part in the Double 12 event. Discounts were also made available to over one million merchants via Koubei, Alibaba and its parent company Ant Financial’s mobile payment service in stores. This move not only expanded Alibaba’s source of revenue but also helped extend the cross-border coverage of Alipay, Ant Financial’s third-party payment platform, into the European and American markets.
However, unlike the 11.11 event which generated a total of $17.8 billion in 24 hours, Double 12 has not yet reached the same level of success that Singles’ Day has achieved in the past years.
This year, it generated sales from more than 49 million Alipay users who participated in the shopping spree. Most of the Alipay users were from Shanghai, Hangzou and Beijing, while 300,000 were overseas shoppers, 300% higher than last year’s. According to Ant Financial, most of the overseas spending came from France at an average of $3,760 (RMB26,000) per person, followed by the UK at $1,593 (RMB11,000) per person. According to Samuel Fan, chief executive officer of Koubei, the event helped connect 1.5 million merchants to 110 million consumers.
The e-commerce market is now flooded with many online sales and promotions by companies who are taking advantage of the consumers’ impulsive spending habits. To differentiate it from other online activities, Double 12 has been packaged as a “social or community commerce” that offers small merchants – which are overshadowed by bigger players during other festivals – a platform to boost their sales and a product suite composed of digital marketing, customer relationship management, and financing tools. Other online platforms also need to find other ways to attract more buyers and merchants. With a saturated arena, there is a great demand for players to differentiate themselves and stay attuned with customers.
Keywords: Alibaba, Alipay, Ant Financial, 12.12