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618 Encountered A "Cooling Off Period", But The Data Is Not Optimistic

2023/6/20 21:05:00 0

This year, 618 came as promised, The expected "blowout" did not occur, With a little increase, the overall atmosphere is still mixed with a sense of loss.

For each e-commerce platform, this is the "618 session with the largest investment in history". However, the "good start" data is not so beautiful. According to the securities report, in the pre sale deposit payment stage of Tmall 618, except for jewelry, the average transaction price of all categories has limited growth or declined, among which the average price of facial skin care, men's clothing, women's clothing, outdoor equipment, home textiles and other categories has declined.

In recent years, e-commerce platforms have continuously extended the time line of great promotion, and this year is no exception. But the fact is that the stamina is not enough, and the consumption data is not optimistic. According to the 51st Statistical Report on China's Internet Development, the growth rate of domestic e-commerce users will be only 0.38% in 2022, and the penetration rate of e-commerce industry will even decline by 2%.

Under the increasingly saturated e-commerce environment and gradually prudent consumption attitude, this 618 did not create miracles as expected. However, in May 2023, Dipanjan Chatterjee, chief analyst of Forrester, an independent research and consulting company, pointed out that "don't think consumers will be too conservative about consumption in 2023", which is a positive signal for the uncertain future.

"Consumption downgrade" or "consumption upgrade"?

Under the influence of the economic environment, people's consumption habits are also changing. Price sensitivity has become one of the key words of the 2023 consumer market, and the platform is taking advantage of the current market environment to improve user loyalty.

At the beginning of this year, Taobao announced five strategies for 2023, among which "price power" is one of them. Correspondingly, the launch of new channels such as "price comparison of the same model", "99 special" and "daily special" on Taobao is evidence. JD also launched the "10 billion subsidy" channel in March this year. It can be seen from the naked eye that in order to meet consumers' shopping psychology and needs, all major platforms have made efforts on the "low price strategy" this year, with the goal and intention of covering middle and downstream users and revitalizing the stock market. But does this mean that the "consumption downgrade" is really coming? This is not necessarily the case. Official data shows that within 30 minutes of opening the official flagship store 618 of Tmall luxury products, more than 10 luxury brands had a 30 minute deal, which was more than the whole day of last year.

In view of such extremely differentiated market performance, the latest report - 2023 China Consumer Report gives the answer: people do not downgrade their consumption, but choose more wisely. Although the overall spending of consumers tends to be conservative, they will maintain their quality of life through strict trade-offs.

At 8:00 p.m. on June 15, Tmall 618 Carnival Day was officially launched. Tmall's luxury jewelry category has broken out significantly. VanCleef&Arpels, Bulgari, Boucheron, DeBeers, QEelin, Chopard, AHKAH and other brands have all closed more than last year within 30 minutes of opening.

On the other hand, JD's data performance has also brought surprises to the market. It is reported that throughout the 618 cycle of JD, MaxMara, Valentino and Longchamp have increased by more than 200%, the turnover of luxury brands such as Coach, Tory Burch and MCM has increased by more than 100%, Roger Vivier has increased by more than 60 times, and Maison Margiela has increased by more than 6 times.

The turnover of the top luxury category increased by more than 2.5 times, the turnover of the top luxury jewelry increased by more than 4 times, and the turnover of the top luxury bags and accessories increased by more than 3 times. Among them, the turnover of Bulgari and Loewe increased more than three times year on year, while Celine and Givenchy increased more than 200%; Top luxury new products are still consumers' favorite. In the whole cycle of JD 618, the turnover of Tiffany's new T-Smile necklace has increased by more than five times month on month, and the turnover of Givenchy's new Voyou handbag has increased by more than four times month on month; During JD 618, Loewe's new Hamlock Hobo handbag was sold out 24 hours after its launch.

Figure: In the pre sale stage of 618, the luxury brand transaction data showed eye-catching performance

Combined with the consumption data in the first half of the year and the "record" of 618, it is clear that although the overall consumer market is growing slowly, the luxury industry has released the "consumption upgrade" signal of anti elastic growth. For the overall market, the luxury industry with stable consumer groups and stable consumption strength has injected positive factors into the whole industry.

"Excitement" or "fatigue"?

The annual 618 promotion is a fierce battle, and this year 618 is called "the most voluminous one" under the first confrontation of four female executives. But an indisputable fact is in front of us - consumers' enthusiasm for Dajin is declining.

Although various platforms play in various ways, in the "post epidemic consumption era", people seem "unable to play". At the beginning of the promotion, consumers are willing to ponder over the ways to play, maintain a high degree of excitement, and overshadow the irrational carnival atmosphere online. Now, it seems to be common for ordinary products to reduce the amount of money, live broadcast, and shopping. Due to the cultivation of consumption in daily life, the demand for hoarding is no longer as strong as before. The competition and sophisticated play before the platform make consumers feel powerless.

Although there are fewer and fewer consumer goods that can bring consumers a sense of freshness, the price reduction or staging of luxury goods that have always maintained a high cold attitude during this rush really makes consumers feel the stimulus and impulse of consumption.

It is understood that among the luxury products of Tmall this year, many commodities participating in 618 can enjoy interest free installment of 12 periods. Among them, the popular Bottega Veneta Cassette handbag, Chopard HappySport wristwatch, IWC Portugal series chronograph wristwatch, Qeelin official Wulu series, Alexander Mcqueen white shoes, Tod's Lefu shoes, etc. all enjoy 24 interest free periods. In addition, some luxury brands also participate in the "300 yuan minus 50 yuan" activity; Bottega Veneta, IWC, Chopard and other brands also participated in the "Member Challenge Plan" launched by the platform for the first time, providing limited gift packages for store members, etc. Consumers can enjoy exclusive rights and benefits when they join the club for "0 yuan".

Jingdong has also made outstanding achievements in financial services enabling luxury consumption. Bulgari, Tiffany, Givenchy, Roger Vivier and other brands enjoy 24 installments of interest free; Burberry and QEelin stores enjoy 12 interest free periods, of which Wulu series and BoBo series enjoy 24 interest free periods. Loewe and Givenchy stores also enjoy 100 times of Jingdou, Bottega Veneta double of Jingdou and free gifts, as well as luxury goods and big brand watches at a discount of up to 30%. They can also enjoy online private customization, exclusive gift boxes, multiple free gifts Luxury 1v1 exclusive customer service and other special services.

Figure: Luxury brands have increased price reduction or staged play during this promotion

In the post e-commerce era, how does the promotion reach its climax?

E-commerce promotion is an online presentation of offline shopping scene changed by digital technology. In addition to sugar coated bullets, simple and pure promotion methods can better meet the real needs of consumers. Today, with the full coverage of digitalization, the "era dividend" of e-commerce will eventually be cleared, and the way to win in the future will certainly not be the same as yesterday.

Previously, in Shiseido's first quarter financial report data, the performance of e-commerce sales and high-end market in the Chinese market did not meet the company's expectations. Due to the poor performance of Women's Day in March, the company will reduce its dependence on major e-commerce promotion festivals such as "618". Takayuki Yokota, chief financial officer of Shiseido, said that we will continue to get rid of the heavy dependence on e-commerce promotion activities and achieve sustainable and profitable growth with appropriate resource allocation.

In contrast, offline, Huang Weiwei, the head of beauty category of Intime Department Store, said that 618 was a traditional online node in the past, but with the deepening of shopping mentality, the brand is paying more and more attention to the power of 618 offline retail. Data shows that in April, the customer flow of Intime Department Store exceeded that of 2019, which gives great confidence to offline retail.

Figure: In April 2023, the passenger flow of Intime Department Store exceeded that of the same period in 2019

In this regard, the brand seems to have tacit understanding and consensus. The first offline activity of 618 this year was earlier than online, and the strategy focused on both efficiency and experience. The long promotion period of the activity cycle is more suitable for spending most of the time in the consumption experience. In this atmosphere, the consumption growth will be promoted. There is no doubt that offline has absolute advantages in sense.

It is worth noting that offline Aolai has become the main battlefield for more consumers this year. Olai infiltrates low price discounts into consumers' daily life, and does not rely on a big promotion to attract consumers' attention. Although seemingly unmoved, Aolai has huge consumption potential. As a result, on the eve of 618 this year, JD launched the flagship Aolai channel, which also confirmed the attraction of Aolai to e-commerce giants and the strong support offline for online.

Figure: Offline Aolai has become the main battlefield for more consumers

When the trend of rational consumption returns, the real shopping experience of returning to the nature may be an outlet for further climax.

After going through the cycle, how to communicate with consumers in a more sincere way is the key to promote the node and trigger the market carnival. Instead of following the same pattern of consumption atmosphere, it is necessary to have practical discounts and in-depth experience to really surprise consumers. Therefore, for e-commerce platforms, big brands, discounts and shopping experience are the key factors to break through the "cooling off period".