As Alibaba enters its 14th Singles Day shopping event, the e-commerce giant that founded the annual shopping phenomenon is pursuing new growth strategies this year by expanding the influence of its livestreaming channel and growing its membership program to cultivate loyal customers for its merchants.
More influencers joining Taobao Live
Chinese consumers are now used to shopping via Taobao Live, the livestream shopping platform embedded on Alibaba Group’s e-commerce marketplace Taobao. This year’s Singles Day event is set to attract more buyers to watch and shop on Taobao’s livestreams due to its continued rising attraction to influencers and the expansion of brand livestreaming.
In the first hour of the first sales window this year, the number of views recorded by Taobao Live increased by 600%, compared with the same period in 2021. Over 500,000 new hosts have joined Taobao Live over the past 12 months, including key opinion leaders (KOLs) such as Luo Yonghao, a serial tech entrepreneur who used to stream exclusively on Douyin, the Chinese version of TikTok.
Chui Xue, President of Industry Development and Operation Center of Taobao and Tmall, Alibaba Group said that, “Livestreaming has become a storytelling format for delivering product information. Consumers are getting used to longing for a particular product through content consumption.”
Shifting to a membership strategy and building brand loyalty
As China’s largest online retailer, Alibaba is transforming consumer awareness into consumer loyalty as its domestic consumers reach the milestone of 1 billion. For Alibaba, brand loyalty memberships have become a key focus, as membership allows brands to interact most directly with consumers and, for some, ensure a higher degree of certainty over sales during and beyond the Singles Day event.
During the presale period from October 24 to 31, brands on Tmall gained in excess of 66 million new members. On November 1, 82 brands surpassed RMB 100 million in GMV generated from their members. More than 4,000 brands saw their member-led GMV more than double year-on-year, and brand members contributed more than 50% of the GMV for 2,700 prominent brands.
“11.11 is the most powerful engine for our merchants’ customer growth every year. Transforming consumer awareness into customer loyalty is key to generating the best return on investment. We will introduce technology and business innovations while enhancing supply-demand matching and loyalty membership management, to support our brand and merchant partners. Ultimately, we aim to turn customer assets into the most important driving force for merchants’ long-term business growth,” said Alibaba’s Chui Xue.
Bain & Company said in a report on Singles Day 2022 that retailers need a comprehensive understanding of their target customers to find the right loyalty levers for their business. “Alibaba is one retailer that has made strong progress in shifting focus from GMV to customer loyalty,” the report noted.
In this year’s Singles Day event, Alibaba aims to help millions of retailers attract and keep customers through its comprehensive brand loyalty membership programs.
Loyalty is a better goal than GMV
With the macro challenges posed by the Covid resurgence in China, retailers are looking for better strategies to convince consumers to shop. In the Singles Day report, Bain & Co advised retailers to “stop fixating on the gross merchandise value (GMV) as a measure of success.” This year’s macro environment and the further saturation of the Chinese online retail market have made such suggestions all the more relevant.
“It doesn’t really matter if retailers breach the RMB 1 trillion mark for Singles Day GMV this year,” said the consultancy, adding that retailers should ask themselves a series of questions when shifting to a loyalty strategy, such as how to measure loyalty and high-quality growth, do investments in customer loyalty generate higher profits, and how to better integrate offline and online offerings.
Alibaba has been preparing for loyalty membership mechanisms for years. In 2018, the company established an ecosystem-wide loyalty program called 88VIP, giving members a 5% discount on more than 300 branded products and other membership privileges across Alibaba’s platforms. The program now has over 25 million members with an annual average spend of more than RMB 57,000.
Case study: Pet products find consistent growth through membership
One of the first sectors that benefited from membership loyalty programs is pet care. “Membership programs can bring in loyal consumers, and cultivate potential consumers,” said Claire Sun, the Onmi-SPT Associate Marketing Director of Royal Canin, a pet food brand with 1 million members and a decade-long presence on Tmall. She added that the company believes that “developing members through marketing and other means is important to the long-term growth of our business.”
Baby Care, an infant product brand, has operated brand memberships on Tmall since 2018. “We have always believed in membership operation as a new strategic growth point for the brand. So far, we have accumulated 15 million members through the brand membership program. I believe the brand membership system can help us better reach consumers,” said Yang Yang, vice president of the company.
As online retailers continue to navigate the current economic downturn, Alibaba is using the annual shopping festival to lay the groundwork to become more resilient. In a market that’s very used to online shopping and increasingly demands better quality services, the e-commerce giant hopes to support brands to secure steadier revenues through membership programs and recurring purchases.