Taobao revamps 'Double 12' festival: A strategic move to tackle consumer fatigue?

Double 12 on Taobao is one of China’s biggest shopping festivals, but this year, customers will be experiencing something different as the annual shopping spree has been revamped to “Year-end Good Price Festival”, offering better deals with larger merchant and product scale.   

In a conversation with MARKETING-INTERACTIVE, Taobao and Tmall Group said during the Double 11 flat sales period, the Good Price Festival brought explosive growth to small and medium-sized businesses.  

“The newly launched “Year-end Good Price Festival is a continuation and enhancement of the Good Price Festival, showcasing Taobao's diversified products and opportunities for various merchants,” the statement reads.  

Since the announcement was made on 24 November, it has drawn mixed reactions from netizens. Media intelligence firm CARMA saw over 1.1k mentions with 21.7% positive and 23.3% negative sentiments. The brand sentiments revolving around TaoBao are 6.9% positive and 33.2% negative. 

“The positive sentiment remains the same as of now because the year-end shopping festival remains an important topic of discussion important to consumers, however an increase in negative sentiments reflects the mood of the economic downturn with consumers who are not happy about the revamp of the festival,” said Divika Jethmal, head of marketing, Asia, CARMA.  

Meanwhile, social monitoring firm Meltwater saw over 900 mentions in China regarding the festival since 24 November, with 11.2% positive, 82.7 neutral and 6% negative sentiments. 

A check by MARKETING-INTERACTIVE also saw the announcement garner over 800 million views on Weibo. Many Chinese netizens said they were not surprised about the revamp, citing a lack of enthusiasm for shopping amid economic uncertainties. 

A strategic repositioning in the eCommerce world 

The sudden transformation of “Double 12,” which has a history of more than 10 years, did raise some eyebrows. However, industry players MARKETING-INTERACTIVE spoke to believed that this comes as a strategic move for Taobao.  

In fact, this move reflects its determination to navigate the rapidly changing eCommerce industry, amid the impressive revenue growth of its competitor Pingduoduo during Q3 2023, and where price consciousness is prominent, according to Carmen Wu, head of Havas Market Hong Kong.  

“Against this backdrop, Taobao's move demonstrates its strategic intent to create more growth opportunities and expand its market share through a ‘low price strategy’ and a focus on consumption downgrading,” she added. 

The latest revamp also shows that Taobao is adapting to a change in consumer sentiment. Given the "general disinterest in shopping due to economic uncertainties" among Chinese consumers, shifting towards promoting value and affordability could serve as a strategy to re-engage customers and sustain sales, according to Ashley Dudarenok, founder of China digital consultancy ChoZan. 

“Chinese consumers are also tired of the complicated discount systems. Taobao usually offers discounts through the "满减优惠" method (e.g, 50 yuan off for every 300 yuan spent),” she added. 

By shifting its focus towards offering products of better quality at reasonable and affordable prices for consumers, Taobao’s move will benefit consumers as well as small to medium-sized brands.  

“Through emphasising quality and affordability, Taobao aims to diversify its offerings and create opportunities for smaller players in the market. By providing a platform for these brands, Taobao aims to challenge the dominance of larger players and promote a more inclusive ecosystem,” said Jesamine Poon, head of growth, local eCommerce agency YAYABABY. 

How can eCommerce brands adapt to the change in consumer behaviour? 

China has seen an abundance of huge shopping festivals over the years. However, the increasing dissatisfaction with complicated discount systems and the oversaturation of shopping events highlights a need for eCommerce platforms to innovate and align with evolving consumer preferences, said ChoZan's Dudarenok.

Speaking from a wider perspective, the market has witnessed a capital-intensive environment focused on significant investment in traffic and monetisation over the past three years, Havas Market’s Wu said. “This approach allowed brands to achieve rapid growth at scale. However, some brands that emerged during this period have faded away,” Wu added. 

Wu added that recent successful brands on Taobao share common characteristics that contribute to their achievements, including prioritising long-term value while navigating short-term trends, as well as possessing unique advantages in areas such as research and development, product supply chain, brand core values, and content. 

“By embracing these strategies, brands can position themselves for sustainable growth and success on platforms such as Taobao,” Wu said.  

Brands, that have historically made significant investments in promotions during major events and stocked up on large inventories to meet demand, will find it relatively easy to adapt to this new pace, according to YAYABABY’s Poon.  

"This shift in Taobao and Tmall's strategy provides brands with more flexibility to focus on delivering improved outcomes. Instead of solely relying on price-driven promotions, brands can now concentrate on delivering better quality products that align with the values of Chinese consumers,” Poon said. 

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