168.2 billion, behind the glamour, how long can the Double Eleven carnival last?

168.2 billion.

Alibaba achieved its Double Eleven sales target as expected.

We have to admire that the Alibaba team took only eight years, or three years to be exact, to transform an ordinary promotional event into a national shopping festival that even exceeds the scale and attention of traditional festivals.

When it comes to e-commerce , Alibaba is number one, at least in China. That’s its genes.

Whether it is promotion or drive, from 2009 to the present, the formation of e-commerce consumption habits of Chinese users and the ultimate maturity of the market must have been inseparable from Alibaba.

So, taking Double Eleven as an example, let’s first look at the relevant data of Alibaba’s Double Eleven from the beginning to the present.

Alibaba's Double 11 transaction volume over the years

Alibaba's Double 11 transaction volume growth rate over the years

Yes, judging from the transaction data, everything is so bright and beautiful, and Alibaba is still breaking through the limits again and again. As for the growth rate, although it has dropped significantly since 2013, the overall outlook is still optimistic.

Based on this, for Double Eleven 2018, we assume that Alibaba’s goal is 200 billion, and this figure can definitely be achieved (don’t ask why, we can bet on it), then the overall growth rate will be reduced to about 18%, which is not bad.

But the author, perhaps because of a strong sense of crisis, or being a pessimist, has always believed in the saying that everything that goes up must come down . Of course, this is not to sing the praises of Alibaba's Double Eleven, saying that at some point in the future, Double Eleven will have become obsolete.

The emergence of a phenomenal event is by no means accidental; it must be the result of the joint promotion of multiple controllable and uncontrollable factors. When we talk about Alibaba’s Double Eleven performance, of course this festival created by Alibaba has made a great contribution, but behind the scenes, the improvement of national consumption capacity and the continuous optimization of e-commerce shopping experience are all influencing factors.

Well, any market will have potential as well as bottlenecks. How big is the potential and space of China's e-commerce market? I think this may be the core factor that affects how long Alibaba’s Double Eleven Carnival can last.

So based on the rather bold assumption in the title of our article: " How long can the Double Eleven carnival last?" , let's make some thoughts as follows. We hope to discuss together about shopping festivals like Double Eleven. What is its future?

In the following, the author will start from three aspects: the nature of e-commerce, the nature of user purchasing behavior and some existing hidden problems of e-commerce platforms. After having a deep understanding of the above three aspects, we will be able to think more objectively about how far Double Eleven-like festivals can go.

Next, follow me and enjoy!

1. The essence of e-commerce

Okay, since we want to delve into something, if the exploration of its essence is not clear enough, the credibility of the statement will naturally not be high. This is also the author’s consistent style.

The core of Alibaba is e-commerce, so what is the essence of e-commerce? E-commerce provides people with a brand new way of buying, selling and trading. For both buyers and sellers, it is the ultimate action to solve each other's needs.

It subverts the limitations of the traditional retail model, allowing everyone to satisfy their purchasing needs anytime and anywhere. Shopping activities similar to Double Eleven are essentially a series of planning and operations that combine the smallest units of activities creatively, coupled with the continuous introduction of new black technology, to enrich the entire online shopping experience. To put it bluntly, trying every possible means to squeeze money out of users' pockets is a question that all businessmen have been thinking about (and also a constant pain).

To sum up, the activity is to promote consumption, but if the consumer's needs (including material and spiritual) have been met, then it means that the market is saturated.

China's user base and development space make it difficult for us to even imagine how great the potential of certain single market segments is, and e-commerce must be part of this unimaginable market.

To simplify, we won’t go into any fancy words, but let it be clear: the essence of e-commerce is the embodiment of another new form of transaction.

2. The Nature of User Behavior

In fact, operators like me should really consider learning some psychology knowledge, because the essence of operations work is to effectively connect products with users. We have to study user psychology all the time, which is very hard.

Somewhat off topic.

Back to the topic, operators all know that being familiar with the behavioral habits of our potential users will help in the development of operations. For operators of e-commerce platforms, even platforms like Alibaba, the importance of grasping user behavior data is self-evident.

Okay, so what specific psychological demands of users are reflected behind the purchasing behavior?

Purchasing behavior is a basic need of human society, covering food, clothing, housing and transportation.

Then purchasing behavior can be simply divided into: long-term demand with a certain frequency is a necessary event; short-term impulsive demand is a non-necessary event. The former includes eating, and the latter includes crying and feeling bad and needing to eat to comfort yourself.

In fact, after people's necessary needs are basically met, many unnecessary needs will inevitably arise. But judging from people's habitual behavior, they will inevitably go through a process of satisfying basic demands, enriching needs, and returning to a deep understanding and pursuit of original needs, which is also called a return to rationality.

The same is true for consumption. Users are naturally curious about new things. We have all experienced the process from the most traditional consumption behavior to the initial distrust of e-commerce consumption, to curiosity, to pursuit, and then to making it a habit. Now is the stage when the habit matures.

The booming development of e-commerce has led countless people to predict the decline of the real economy, but we soon discovered that from the perspective of the experience pursued in the purchasing behavior itself, the current e-commerce model is temporarily unable to fully replicate and satisfy the experience of the traditional model.

The past e-commerce models, or the recently proposed new retail or borderless retail models, are all exploring ways and solutions to enrich user consumption behaviors.

There is nothing wrong with this in itself, but what needs to be made clear is that the game between the speed at which users return to rational consumption and the degree of stimulation of platform and merchant gameplay will ultimately affect whether various activities and festivals will still attract user participation.

There are many uncertainties in user consumption behavior. It is impossible to meet the user's purchasing needs for a year in one day. Therefore, the users who pay for festivals like Double Eleven are mostly impulse buyers. However, no matter how the gameplay and variety change, there will always be a limit to how much users can pay for their impulse, and there will also be a bottom line for the user value that platforms and merchants can consume.

So no matter what, the user's purchasing behavior and the market size behind it may be unimaginable, but there will definitely be ultimate limitations.

3. Those unavoidable hidden problems

Yes, usually, we are used to focusing on superficial things, such as how many records Alibaba’s Double Eleven transaction volume broke, whether a certain merchant became the sales champion of the platform, or how much money our friends spent, etc.

But there are too many issues behind it that we are not familiar with.

Behind Alibaba’s glamour is the constant pain in the hearts of countless small and medium-sized sellers.

On the one hand, after years of painstaking operation, the platform must consider how to achieve profitability at the commercial level; at the beginning of the establishment of the platform, merchants enjoyed many traffic dividends, but then the operating costs increased year by year, so many merchants were unable to compete and were eventually eliminated.

There is no right or wrong in either approach; both are solutions to one's most pressing needs over a period of time. But it is obvious that as the incident progresses, the contradictions between the two parties will continue to become more prominent, and the platform will continue to take the initiative (as long as it doesn't show off too much), and merchants will be restricted in every way as a result.

Suddenly it occurred to me that all platform-based companies seem to be going through a process from grandson to brother to grandfather , such as Ele.me , Meituan , 58, etc. We have all experienced these companies from the initial development period of the platform to the unruly state after the platform matures. Perhaps this is the embodiment of business logic, just changing the position and modifying the weapons, the same routine works every time.

Of course, we also have to face common problems. So every platform wants to be the grandfather, but only a few can finally become the boss.

This is an inevitable development, and I think giants like Alibaba will not be vague about this. It does not mean that the platform can just sit back and reap the profits once it matures. It also needs to coordinate relationships with B-end merchants and stimulate consumption from C-end users. In fact, there is still a lot for the platform to do. As the saying goes: It is easy to start a business but difficult to maintain it.

Even many reports before and after Double Eleven and interviews with many small and medium-sized businesses were more pessimistic, saying that Double Eleven is no longer the world of small and medium-sized players in front of B-end users. The pyramid shape has been formed, and the 80/20 rule is effective again within the platform.

Okay, now all platforms are talking about the vision of decentralization, but I still firmly believe that this is just a false proposition. Be it Alibaba or WeChat , it is just a beautiful direction. You must firmly believe that decentralization can delay the formation of the center to a certain extent. You must also know that the process of decentralization provides many participants with unequal conditions to compete and strive to become the final few winners.

Therefore, it is a bold assumption that in the future, a series of problems may arise due to B-side merchants losing confidence in the platform. And now the problem has begun to emerge.

4. So what then and finally?

I have raised various problems and crises above, so, what next? Platforms such as Alibaba will not sit idly by and watch the inevitable year-on-year decline in traffic, participation and attention during the Double Eleven-style shopping festivals in the future, and will definitely think about how to solve the problem.

This involves the question of the future prospects of e-commerce, which is really a good topic.

There are two new concepts that have been mentioned frequently in the e-commerce field in the past one or two years: new retail and borderless retail.

Whether it is new retail or borderless retail, the purpose is to enrich the existing experience of each platform and allow users to gain more fun in their purchasing behavior.

This is the next path the platform will take. At the strategic level, Double Eleven is just one of the links.

Of course, the platform cannot monopolize the market forever. When B-side users are oppressed to a certain extent, these users will inevitably be forced to seek other ways, after all, for better survival.

Finally, under the dual conditions that some B-end users are ignored and eliminated and C-end users are satisfied, the value of IP for festivals like Double Eleven will inevitably be continuously weakened, and users' sensitivity to it will gradually decrease. Eventually, like most festivals, it will become a commonplace in the lives of each of us.

From the data, under the premise that the market space is constantly being squeezed, the transaction volume of Double Eleven will eventually face an inevitable decline one day. What Alibaba and its operations team can do is undoubtedly to delay the arrival of this day.