After experiencing the coldest Double 12 in history in 2022, this year's Taobao Double 12 has exited the historical stage.
Recently, according to the Taobao Merchant Service Hall, the Taobao Double 12 event will no longer be held this year and will be replaced by the platform's large-scale event "Taobao Annual Good Price Festival". Investment will begin at the end of November.
This is the first major move that Wu Yongming made after taking up the position of Chairman of Taotian Group, which shocked the industry.
"The interval between the two major promotions is too short, and after the Double 12 shopping festival, there will be a New Year's goods festival. It is difficult to stimulate consumer enthusiasm with intensive activities," e-commerce practitioner Li Jing told Time Finance.
However, senior online shopping user Min Min is indignant about the cancellation of Double 12. Previously, she allocated a portion of her purchasing desire to Double 12. "Double 11 'digested' more than half of the shopping cart links, and there are still many missing items to place orders for."
In response, Taotian stated that the Taobao Good Price Festival will start at 8pm on December 9th. Compared to previous years of "Double 12", the discount intensity, merchant scale, and product scale will all be significantly increased.
Unsold merchants, hollowed out buyers
In 2009, the first Double 11 was born as a dark horse, with 27 brands generating sales of 52 million yuan in just 24 hours. Two years later, the Double 12, aimed at clearing inventory and targeting small and medium-sized businesses, was born under the halo of Double 11.
In 2011, Taobao launched a "nationwide frenzy" campaign on December 12, with a transaction volume of 4.38 billion yuan that day. The record for Double 11 that year was 5.2 billion yuan, and the consumption potential unleashed by the two can almost be compared.
As a member of Taobao's small and medium-sized businesses, Wang Ping has tasted the sweetness of the Double 12 promotion. She sold casual pants for 9.9 yuan during a clearance sale and shipped hundreds of orders in a day. "At that time, the competition on e-commerce platforms was not as fierce, as long as we ensured good supply, the starting quantity was very fast."
The glorious record of Double 12 did not last long. The sales cycle for Double 11 in 2020 has been extended to 21 days, compressing the sales space left for Double 12. Even the Double 11 has been losing its appeal year by year. Data shows that in 2021, the total transaction volume of Tmall's Double 11 was fixed at 540.3 billion yuan, with a growth rate of only 8.45%, more than two-thirds of the previous year's 26% growth rate. In the context of a decline in transaction volume growth on Double 11, it is also difficult for Double 12, which shares the same momentum as Double 11, to reproduce a sales miracle.
In 2019, live streaming e-commerce gradually flourished, and e-commerce entrepreneur Wen Jie noticed a change in direction. He and some individual merchants tacitly withdrew from the big promotion in the second half of the year. Wenjie originally planned to take advantage of the big promotion nodes of Double 11 and Double 12 to attract new store business, but under the overwhelming shouting of the brand owner and top anchors, he did not wait for the expected effect.
"The promotion fee has burned a lot, but the conversion rate is very low. If we persist in investing in it, the cost is completely unaffordable," Wen Jie said to Time Finance.
Not only that, in this two month marathon tug of war, some mid to low back businesses also feel powerless. For them, attacking the Double 11, reducing investment in Double 12, and attacking the New Year's goods festival is the reasonable pace of promotion.
The head of an e-commerce channel for a certain brand told Times Finance that the long Double 11 promotion cycle has exhausted users' consumption desire, resulting in the brand's sales data declining year by year. "Last year, the sales of Double 12 could only reach half of Double 11, and the team needed time to review and adjust strategies, making it difficult to free up energy to study consumers' new needs."
Can low prices revive Taobao?
The exit of Double 12 and the filling of the Taobao Good Price Festival are not unexpected.
This year's 618 shopping festival, Taobao launched its first exclusive 618 marketing channel for small and medium-sized merchants on Taobao. This is the first time in the history of e-commerce that a marketing IP has been customized for small and medium-sized sellers. At present, the Taobao Good Price Festival is located at position C on the homepage of the Taobao APP, on par with Taobao Live and Taobao Maicai.
However, Taotian's abandonment of Double 12 has not been transmitted to other platforms. As early as the middle of November, Tiktok Mall launched the "Double 12" investment attraction and launched the "20 minus 20 for every 150 stores across the store" full reduction mechanism, reducing the threshold for consumers to participate in order making. JD and Pinduoduo also launched the "Double 12" warm-up, and clearly marked the symbol of "Double 12" on the APP icon.
The readjustment of Taobao's major promotion strategy to some extent reflects the current anxiety of Taobao. On the one hand, veteran e-commerce has gained price power for products, and on the other hand, the strong rise of e-commerce focused on content has shaken the dominant position of Taobao and Tmall in the brand promotion stage. According to a Goldman Sachs report, Taobao and Tmall's market share has decreased from 66% in 2019 to around 44% in 2022, a significant drop of one-third over four years.
A high-frequency e-commerce consumer believes that Taobao has gradually lost its core competitiveness, with some users purchasing high unit price products flowing to JD.com, and some market share of daily consumables being taken away by Pinduoduo. "The style of Taobao has become no different from offline physical shopping malls, with many unique personal stores missing. The search results are all flagship stores of various brands, and homogeneous products are rampant."
"In the past two years, some emerging brands have focused their main battlefield on interest e-commerce. Based on the efficiency of content feedback, brands can capture consumer needs from the interaction of video content." The founder of a certain skincare brand told Time Finance.
At the recent Alibaba 2024 Q2 financial report conference call, Alibaba Group CEO Wu Yongming clarified Taotian's business priority. Focusing on user first, Taobao has three principles: adhering to the omnipotent Taobao, adhering to consumption classification and pricing strategy, and adhering to the user value trade-off of products. In the process of Taobao's consumption grading, small and medium-sized merchants are undoubtedly important resources for Taobao to launch a low price war.
Individual seller Wu Na participated in the year-end good price festival on Taobao. She had never experienced such a smooth registration process before. As major platforms wooed small and medium-sized merchants, she shifted the focus of channel operation to Taobao.
Previously, the important activities on the platform were only focused on top brands, and we couldn't even meet the conditions. This year, most of the important activities were opened to small and medium-sized businesses, and the team was almost busy from August until the end of the year. One week before the official start of the Good Price Festival, Wu Na's store experienced a small sales peak, with a daily order volume exceeding 200 orders, indicating a return to the peak period of explosive orders.
"This time, Alibaba should want small and medium-sized businesses to return to the trading table. Bottom tier sellers have low product costs and are an important ally in Taobao's price war. As long as businesses choose to lower prices, traffic can tilt towards them the next day." Li Jing told Time Finance.
However, whether Taobao can continue the glory of the Double 12 with the year-end good price festival ultimately depends on whether it can awaken consumers' long dormant desire to purchase.
(The interviewees in the article are all pseudonyms.)