China’s ‘Black Friday’ is here: What brands need to know about Singles’ Day 2023

For luxury brands, seizing the spotlight on China’s Double 11 or Singles’ Day shopping festival involves a sophisticated dance between exclusivity and accessibility. Held on November 11 each year, Singles’ Day is among the most important shopping festivals in China. In 2022, Singles' Day sales hit an impressive $84.5 billion in gross merchandise value (GMV), dwarfing the GMV of Amazon's Prime Day by more than sixfold and outstripping the total online spending of US consumers on Black Friday by nearly ten times. This year, as virtual shopping carts begin to fill, two trends are taking center stage: an unprecedented commitment to value-driven pricing and an e-commerce landscape where traditional storefronts vie for consumer attention with emerging technology. How can luxury brands take charge? Value innovation The winning Singles’ Day strategy for luxury this year is value innovation, the simultaneous pursuit of differentiation and low cost. Due to limited room for price adjustments, launching limited edition products during Singles’ Day is one way to enhance the consumer experience, says Olivia Plotnick, founder of China marketing agency Wai Social. “Whether it is increasing attention and topicality through the release of new products, special packaging of goods sold during Singles’ Day, or ensuring the online supply of certain scarce goods through internal brand coordination, these are all important ways to enhance the consumer experience,” Plotnick says. Value is not about vicious pricing but strategic packages, backed by potent marketing narratives. Diving deep into the pricing strategies reveals a two-pronged approach: absolute value and relative value. As Xin Lijun, CEO of JD.com, shared in a press conference, "In a market where consumption is becoming more rational, customers are willing to purchase high-priced products but not overpriced products (可以买贵的，但不能买贵了)." Put bluntly, the discerning Chinese luxury consumer at a shopping festival will accept paying less for the same value or paying the same for more value. Xin shares, "It's about respecting the consumer's intelligence and catering to their evolved sense of value." That arsenal of tools includes exclusive early-access deals, limited-edition releases, and crafting beautiful brand narratives. As Wai Social’s Plotnick adds, “China's affluent consumers are increasingly seeking new experiences and expecting more from luxury brands. The younger Gen Z consumers are entering the realm of luxury brands at an earlier age, demanding meaningful value, timeless appeal, and a platform for personal expression.” In 2021, Valentino reimagined the essence of Singles’ Day by unveiling two succinct brand films that underscored the festival's underlying spirit, that is, embracing self-appreciation without the need for external affirmation. Collaborations with high-end artists or limited capsule collections add a layer of rarity and desirability. For example, C-beauty brand Perfect Diary released a limited edition collection in collaboration with the popular game Arena of Valor for Singles' Day 2021. This strategic positioning, far removed from the price wars, not only drove sales but also cemented brand loyalty and prestige. AI shopping assistants This year's festival introduces AI enhancements to shopper interactions. Alibaba’s AI chatbot, Wenwen, has been in beta testing since September. Over five million users have tried it since. The chatbot is being rolled out more widely for this year’s shopping festival. Wenwen will respond to customer inquiries, giving optimized and personalized suggestions on best-value purchases, from tech gadgets to beauty picks. More than a digital helper, Wenwen can also decipher complex discount combinations, facilitating smarter buying choices. As revealed at a recent press conference in Shanghai, merchants on platforms like Taobao and Tmall are anticipated to receive support through AI-powered services such as automated image generation and data analysis, alongside AI customer service representatives. These enhancements are positioned to optimize operations, potentially freeing up resources and allowing for a more nuanced and personalized approach to consumer engagement. Rather than leaning solely on slashed prices, luxury players should stay poised, driving value through pricing innovation and new technology.

China’s ‘Black Friday’ is here: What brands need to know about Singles’ Day 2023

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Published October 27, 2023

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China’s ‘Black Friday’ is here: What brands need to know about Singles’ Day 2023