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Lazada, the leading ecommerce platform in Southeast Asia, will launch a 24-hour Mid-Year Festival on July 12 across all its six markets.

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JD.com and Alibaba reported record breaking results for the 18-day campaign, with sales value up by +26%YoY.

The festival has evolved to be a major midyear ecommerce event

6.18 shopping festival, created by JD.com, now joined by Alibaba, has become a midyear event that can match the scale of the 11.11 global shopping festival.

The total sales transaction reached a new high this year of US$29.2bn, up by +26%YoY.  Around 200,000 brands took part and more than 110 brands each generated sales in excess of CYN100mn (US$14.5mn).

There are four key learnings from this year’s event, which are summarised below.

Less developed regions becoming the new growth engine

There has been a steadily rising demand from consumers in lower tier cities for quality products. With an increase in discretionary income, consumers in less developed areas are quickly becoming a main consumption engine and really drove this year’s 6.18 festival:

  • Volume growth was twice as high in lower tier cities than the overall growth on JD.com
  • Percentage of new users from lower tier cities was also much higher than the percentage of new users overall
  • 48% of the products newly launched on Tmall during the event were purchased by customers in less developed areas

Innovative approaches to widen reach and build engagement

This year’s event saw an array of innovative ways to reach customers and build engagement. The highlights are:

  • Social media played a key role: Two marketing campaigns had more than 100 million participants, all involving sharing on social platforms
  • Livestream to promote brands: Taobao’s livestreaming was an effective and important channel to reach shoppers. With hosts making recommendations for “must-buy” products, Taobao livestreaming helped generate more than CYN13bn sales. The number of livestreaming sessions hosted by brands increased by more than 120% vs. last year
  • Direct manufacturer-to-consumer model: Taobao’s Daily Deals, a channel which allows consumers to ordered customized products straight from the manufacturers, generated over 420 million orders

Group buying was a major push

Alibaba’s group buying platform Juhuasuan drew 300 million new customers. The platform has been repositioned recently for those looking for quality goods at competitive prices. Group buying via WeChat was also available in Hong Kong during this year’s event.

Technology used to meet customer expectations

Technology played a key role during the event to improve customer experience and exceed their expectations. JD.com’s smart customer service robot dealt with more than 32 million inquires, freeing up human services for more complicated inquires. 91% of orders from JD.com’s fulfilment centres were delivered on the same day or next day.

 

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For the 16th year, the 18-day Mid-Year Shopping Festival which culminates on 6.18 has begun. This year, the online giant JD.com is focusing on social commerce and has launched WeChat group-buying in Hong Kong.

Engaging shoppers beyond discounts in mainland China

Last year, JD.com sold around CNY159.2bn (US$23bn) worth of products during the shopping festival. There are more than 50m products listed, including daily lifestyle products, and food and grocery.

This year’s event has a strong focus on driving engagement through social commerce, using existing customers to reach new. JD.com has allocated CNY500m (US$72m) for a nationwide city contest that requires participants to get their friends and/or family to engage with the retailer, retrieving virtual red packets of luck money. These can be redeemed for JD.com store credit during 6.18.

Group-buying on WeChat Hong Kong available

While 6.18 is long established, JD.com is only operating the event in Hong Kong locally for the second year. The retailer has increased promotions this year, introducing group-buying on WeChat Hong Kong and its online platform.

The group-buying (pingou) service will allow shoppers to purchase products at a significantly lower price than the single unit cost once they join or form their own shopping ‘team’.

JD.com has reported a record-breaking US$24.7bn during the 18-day shopping festival. This year the ecommerce giant has provided shoppers with the 'boundaryless retail' experience, benefiting from its technology and retail partnerships.

Pop up stores and experience centres

1,400 brands showcased their products and interacted with Chinese shoppers during the festival in JD’s pop-up stores and experience centres. Shoppers could sample foods, trying on clothes and testing home appliances before making a purchase online. The pop up shops, which spanned 30 cities, received over 43 million visits.

Daojia delivery from physical stores

Besides buying online, shoppers were also able to buy products from bricks and mortar retailers on Daojia’s platform and get the purchases delivered to their homes. Orders to Walmart stores via JD Daojia, for example, quadrupled during the 6.18 sales period from the same period a year earlier.

Augmented reality facilitated shopping

JD’s AR Styling Station, a function in the JD mobile app, enabled shoppers to test the new looks without physically trying on the products. 52,000 boxes of Johnson & Johnson’s 1 Day Acuvue Moist lenses were sold in one day during the festival.

Behind the numbers, it was JD.com's superior supply chain that made sure 90% of orders were delivered on the same or next day, despite the spike in order volume. The sale this year has shown us the potential of retail in the future.

Amazon to more than double number of products available in Indian market.

Expansion of product range makes service more attractive

Encouraged by the initial success of the Prime program, Amazon has announced plans to offer more than 25 million products via the service, up from 11 million products previously.  The retailer will also expand its video services to include more locally produced content and introduce Amazon Prime Music.

Broad appeal of Prime service

Under Prime, Amazon offers fast delivery, additional discounts and video streaming to members. This combination of benefits is clearly appealing as the retailer has seen subscription to its membership service rise steadily, across 300 plus cities.

By expanding the Prime program, the retailer is confident this will be a key differentiator for market share versus local competitors.

Justifies price increase

In November 2017, the retailer increased the subscription price for Prime to INR 999 (US$15.70) a year from INR 499 (US$7.85). Akshay Sahi, head of Amazon Prime in India said, “With increased selection, we feel that Prime is worth that (price). The benefits we’re providing have reached a significant value and customers have had enough time to try that programme.”

Though Amazon declined to share the number of Prime subscribers, it said that about 30% of all orders on Amazon India come from Prime subscribers. Prime customers are known to spend more on Amazon than non-Prime subscribers, to buy products they weren’t buying earlier, and tend to reduce their spending on other platforms.

 

 

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