Loyalty Membership Programs Spearhead Alibaba’s New Singles’ Day Growth Opportunities

What happened On October 24, Alibaba Group officially launched the start of its 14th 11.11 Global Shopping Festival, also commonly known as the Double 11 or Singles’ Day. The presale started at 8 p.m. Beijing time and will be followed by two “check-out windows”: one from 8 p.m. on October 31 to November 3 and the other from the same time on November 10 to 11. This year, over 290,000 brands from more than 90 countries and regions will offer 17 million products in 7,000 product categories to Chinese consumers — making this year’s celebration the most diverse one Alibaba has ever hosted. At a media briefing, the e-commerce giant emphasized that the focus this time is on helping merchants achieve customer growth by upgrading shopping experiences and researching purchase influence factors. “Transforming consumer awareness into customer loyalty is key to generating the best return on investment,” says Chui Xue, President of Industry Development and Operation Center of Taobao and Tmall. “Ultimately, we aim to turn customer assets into the most important driving force for merchants’ long-term business growth.” The Jing Take Alibaba’s pioneer status, focus on customer loyalty, and mature membership programs may give the company an advantage to stand out from other platforms. As China’s e-commerce ecosystem continues to evolve, pricing discounts alone are no longer sufficient to ensure continued allegiance from shoppers. A 2022 Singles’ Day report from Bain found that 37 percent of the 3,000 surveyed consumers from a wide range of Chinese cities plan to shop over five or more e-commerce platforms this year, indicating that these promotional offers from different retailers are highly interchangeable. The report also shows that loyal customers place relatively low importance on pricing when it comes to why they recommend a certain retailer to friends or colleagues. Therefore, identifying ways to retain high-spending consumers is critical for platforms to achieve long-term, high-quality growth. To this end, Alibaba has made significant progress. More than 40 labels on Tmall have membership programs that surpassed 10 million members and 600 have ones with over a million. These members tend to spend longer on Alibaba’s platforms and have contributed to over 40 percent of these brands’ growth. To maximize the benefits of such initiatives to both customers and merchants, Alibaba also launched the 88VIP premium membership program in 2018 across its ecosystem. 88VIP currently boasts over 25 million sign-ups and encompasses a variety of categories that include luxury houses such as Gucci, Giorgio Armani, and La Mer. For a 12.1 (88 RMB) annual fee, members get an “all-access pass” that provides additional benefits such as more coupons, extra privileges, and a one-on-one dedicated customer service throughout Alibaba. For brands, 88VIP is an effective tool to strengthen consumer engagement, turn their customers into Key Opinion Consumers (KOCs), and expand their high-quality customer base. The fact that 88VIP members spend an average of more than 8,000 (57,000 RMB) per capita per year means that brands can leverage the program to unlock more consumption from high-paying customers. All in all, Alibaba’s brand membership programs and its 88VIP project form a new e-commerce retail structure. Strong purchasing power from loyal high-value shoppers offers a reliable and sustainable source of growth, allowing Alibaba to focus on more than just traffic and sales volumes during this year’s Double 11. Amid the uncertain global macroeconomic environment, this strategy offers innovative ways to maintain growth momentum. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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Loyalty Membership Programs Spearhead Alibaba’s New Singles’ Day Growth Opportunities