E-commerce operations: Why are there more and more e-commerce festivals?

Nowadays, there are more and more e-commerce carnivals. From the once-a-year Double Eleven, to the rise of 618, to promotional activities on various statutory holidays, e-commerce festivals tend to be held once a month. Why are there more and more e-commerce festivals? Can consumers still get good deals during such frequent e-commerce festivals? Judging from e-commerce festivals, what will the future of e-commerce be like?

There are more and more e-commerce shopping carnivals recently.

From the initial Double 11 and 618, to Double 12, Double 10, 818 Fever Festival, to the Double Product Online Shopping Festival and 99 Bargain Festival... the pace of e-commerce platforms to create new festivals has never stopped.

Not only e-commerce, but payment tools have also started to join in the fun. From July this year to date, in order to boost the economy and stimulate consumption, Alipay has launched a series of activities such as City Life Week, 717 Life Carnival, Super 567, and has distributed hundreds of billions of consumer coupons for several consecutive months.

Coupled with promotional activities during festivals such as the Spring Festival, Mid-Autumn Festival, National Day, Chinese Valentine's Day, Women's Day, and Valentine's Day, the number of e-commerce shopping carnivals has grown rapidly in recent years, with a trend of once a month or even several times.

Why do e-commerce platforms create so many festivals? Are consumers really getting the best deal from this? Will there be more and more e-commerce festivals? How will e-commerce develop in the future?

In the e-commerce industry, is it the sheep or the dog that gets the wool? Sometimes it is very interesting to try to figure out the sheep's thoughts from the dog's perspective.

1. More and more e-commerce festivals

On November 11, 2009, Taobao Mall (Tmall) held an online promotion event, which marked the beginning of “Double 11”, which was then called Singles’ Day.

In 2010, JD.com launched the “JD.com 618” event on June 18, the store anniversary day, and the prelude to the cat-and-dog war slowly began.

In 2011, Suning.com joined the battle and launched the 818 Shopping Festival.

In 2013, Taobao Juhuasuan launched the "99 Big Sale", and in 2019 officially changed the name of "99 Big Sale" to "99 Bargain Festival".

The success of the shopping carnival has made major shopping websites taste the sweetness, and e-commerce festivals such as Double 12 and Double 10 have also begun to appear in everyone's vision.

In 2019, the national shopping festival “Double Product Online Shopping Festival” was born.

In April of that year, the Ministry of Commerce, together with the State Post Bureau and the China Consumers Association, organized 10 e-commerce platforms and postal express companies, including Alibaba, JD.com, Suning.com, NetEase, Gome, Vipshop, Jumei, Xiaohongshu, COFCO Womai.com, and Shixing Fresh, to successfully launch the first "Double Product Online Shopping Festival" with the goal of promoting brand consumption and quality consumption.

In 2020, Pinduoduo issued 650,000 consumption coupons at the "55 Shopping Festival" in Shanghai; in the same year, Alipay launched the 717 Life Carnival, giving out tens of billions of consumption coupons to stimulate consumption and help economic recovery.

Looking at the development history of e-commerce festivals, e-commerce festivals have become a battlefield between major e-commerce platforms. An e-commerce platform wants to carve out a piece of land for itself and establish its own home turf, but this piece of land will soon become the target of criticism from other platforms.

As more and more platforms have so-called home turfs, the battlefields of e-commerce become larger and larger.

2. Why are there more and more e-commerce festivals?

From an operational perspective, e-commerce festivals are a typical way of event operation, and event operation is beneficial for e-commerce platforms in attracting new customers, promoting activation, retaining existing customers, and converting them to payment. This is also the direct reason why there are more and more e-commerce festivals.

1. Attract new customers

A consumer who really wants to buy an iPhone but has never used Pinduoduo is likely to become a new user of Pinduoduo after learning that the iPhone on Pinduoduo is several hundred yuan cheaper than on other platforms. Especially for platforms with a small user base, the effect of event operations in attracting new users is particularly prominent.

With the overwhelming publicity for e-commerce festivals, the accurate grasp of user psychology, and the use of methods such as user fission and guiding users to share, many consumers have obediently become new users of e-commerce platforms.

2. Activation and retention

In addition, imagine if the e-commerce platform really only holds a shopping festival once a year, would there really be users who only open the e-commerce platform once a year? Behind more and more shopping festivals, there are actually considerations of promoting user activation and ensuring retention.

People are always greedy. When various discounts and activities on e-commerce platforms continue to appear in front of consumers, there will always be consumers who cannot resist the temptation and repeat the mistake of buying too much again and again.

In recent years, with the increase in e-commerce festivals, the battle line of e-commerce festivals has become longer and longer. A Double 11 event usually starts warming up at the end of October.

On the one hand, the extended shopping front helps ease the peak pressure of e-commerce express delivery and improves the logistics service experience; on the other hand, it also helps to mobilize consumers' consumption sentiment, making shopping during the shopping festival a "major purchasing event" that can be slowly prepared and planned.

As users repeatedly compare and select, the platform's user activity and retention increase.

3. Pay for conversion

Why do almost all e-commerce platforms have a “shopping cart” function? A very important reason is that e-commerce platforms are well aware that consumers always have a few items that they have always wanted to buy but have not yet bought.

With a "shopping cart" function, the platform can always remind consumers: "There is another thing you want to buy here! Don't forget it!".

With the increase in e-commerce activities, consumers have more opportunities to see the items in their shopping carts. Coupled with the various discounts during the event, some users may not be able to resist placing an order.

In addition, consumers’ shopping needs may arise at any time, and more e-commerce festivals can also help shorten the cycle from users’ purchasing needs to placing orders, thereby increasing users’ payment conversion rates.

4. Cultivation of consumption habits

Why can Luckin Coffee fool so many foreign investors? One of the important reasons is that foreign investors believe that the Chinese people's coffee drinking habit can be cultivated.

The same is true for e-commerce.

Once people have money, they want to spend it. This is an eternal truth. During the days when users get their salaries, hold a few e-commerce events to slowly cultivate users' habit of clearing their shopping carts once a month. Over time, users' consumption habits will be formed.

This is also a big reason why e-commerce activities are increasing.

5. Industry competition

E-commerce festivals are a war between e-commerce giants.

Taobao (Tmall) launched Double 11, JD.com followed closely with 618, and Suning was not convinced and organized the 818 Fever Festival; faced with Pinduoduo's strong impact in the sinking market, Alibaba said that it would organize a 99 Bargain Festival to fight Pinduoduo to the end.

It seems that every e-commerce company that does not create its own shopping festival will fall far behind. Faced with an increasing number of festivals, e-commerce platforms will not let their competitors go unpunished and can only fight back.

It is entirely conceivable that in the near future, will Pinduoduo also hold its own "Pinpin Festival"? In addition to the layout of Douyin and Kuaishou in the e-commerce industry, will Douyin and Kuaishou also create their own e-commerce festivals?

By then, consumers will truly be able to live a life where there is a shopping festival every month.

3. Can you get benefits from e-commerce festivals?

The popularity of e-commerce festivals is inseparable from the extensive participation of consumers, and a large part of the reason for the extensive participation of consumers comes from the fact that they believe they can get good deals during the e-commerce festivals.

During Double 11 every year, many netizens find it both painful and joyful to solve elementary school math problems.

I don’t know how many users wanted to use a discount coupon but ended up spending a lot of extra money; I also don’t know how many users said “I will never spend money on Double 11 this year” but ended up browsing shopping websites until 3 or 4 in the morning on Double 11.

During e-commerce festival events, the increasingly complex discount rules and increasingly cumbersome discount strategies make people wonder: Do consumers really get the best deals from e-commerce festivals?

Whether consumers can get good deals depends on: Is what you buy really what you need? The magic of e-commerce festivals lies in that they can entice consumers to buy goods that they don’t really need; and whether consumers can restrain their impulse to place orders frantically determines to some extent how much substantial discount they get.

On August 20 this year, in response to the problem of "big data killing old customers", the Ministry of Culture and Tourism issued the "Interim Provisions on the Management of Online Tourism Business Services", which clearly stipulates that online tourism operators shall not abuse technical means such as big data analysis to infringe on the legitimate rights and interests of tourists.

The so-called "big data killing old customers" is called "price discrimination" in economics. It usually refers to the fact that when a new user and an old user purchase the same product or service, the price seen by the old user is higher than that of the new user.

Does big data price discrimination exist on e-commerce platforms? If it exists, can consumers really get the benefits?

The e-commerce platform creates precise user portraits for consumers, which can help them understand the consumer better than the consumer himself/herself. If e-commerce platforms use these user portraits to set special "custom prices" for consumers, then even if consumers are being ripped off, they will find it difficult to realize it.

So is the wool at this time still really wool?

People, goods and places are the three key points in the e-commerce industry.

As a "market" level platform, the e-commerce platform's revenue comes either from upstream suppliers or downstream consumers. Users may be able to get some benefits from the occasional activities, but how can an e-commerce platform do business at a loss?

For most users, in the long run, they are likely to be the ones who suffer the most.

4. The future of e-commerce from the perspective of e-commerce festivals

Will there be more e-commerce festivals in the future?

——Very likely.

Where there are people, there are rivers and lakes; where there are multiple giants in an industry, war will occur. As a tool for giants to declare war on each other, the importance of e-commerce festivals is unlikely to decline in the short term.

In addition to large-scale events such as e-commerce festivals, small-scale events in the e-commerce industry such as brand promotions and back-to-school discounts are also effective operational tools for e-commerce. In addition, the rise of live streaming sales caused by the epidemic has even made live streaming by popular anchors a very influential activity in the e-commerce field.

Compared with large-scale e-commerce festivals, live streaming has lower costs and a more precise target audience, and can serve as an effective supplement to e-commerce festivals.

Even since 2019, the trend of decentralized e-commerce has become increasingly obvious, and its growth rate is significantly faster than that of centralized e-commerce. Centralized e-commerce means that the traffic is controlled by the e-commerce platform, while decentralized e-commerce means that the traffic is controlled by the merchants.

Currently, decentralized e-commerce is mainly reflected in WeChat mini-programs, Douyin and Kuaishou, which can be called private domain traffic or social e-commerce.

The popularity of the short video industry and its huge traffic, coupled with the active layout of Douyin and Kuaishou in the e-commerce industry, the e-commerce landscape in the post-epidemic era is likely to be reshuffled.

In addition, whether it is an e-commerce festival or social e-commerce, it is aimed at online shopping. Perhaps due to spatial and geographical limitations, offline shopping rarely has widely known e-commerce activities.

However, during this year's "55 Shopping Festival" in Shanghai, Pinduoduo distributed two batches of "300 off 400 cash" coupons to Shanghai New World City, totaling more than 20,000 coupons. On the day when the first batch of consumer coupons were distributed, New World City’s sales exceeded five times that of the previous day, attracting more than 100,000 visitors.

The deep integration of online and offline may bring new vitality to e-commerce festivals.

In fact, whether online or offline, the e-commerce industry will return to payment tools at the moment of payment. Whether it is a discount or a gift, it is not as popular as payment coupons and cash subsidies.

During Alipay’s 717 Life Carnival this year, Alipay sent out general consumer vouchers with 10 billion yuan in subsidies to help revitalize the offline industry. I wonder if you have taken advantage of it?

The e-commerce industry has developed into a very complex and mature industry. However, facing the impact of the epidemic, the entry of emerging giants, the development of social e-commerce, and the integration of online and offline, the road of e-commerce in the post-epidemic era is not easy.

The real carnival in the e-commerce industry has just begun!

Author: FergusNie

Source: Ye Huan