JD.com annual anniversary celebration is the second biggest shopping event in Asia, this year’s 6.18 festival in June saw 37% increase in sales.
Among China’s e-commerce giants, JD.com is instantly recognisable. Launched on 18 June, 1998 as 360buy, JD is now one of the leading e-retail platforms in the world with 301.8 million annual active customers. So it’s no surprise that its annual anniversary celebration, the 618 shopping festival, has evolved to be the key e-commerce event in China’s first half of the year.
618 has established itself not only throughout China’s e-commerce market but throughout Asia. 2018’s 618 saw JD.com Indonesia celebrating its second year, and the launch of JD.com Thailand.
The power of selling
618’s 2018 sales consumption jumped 37% from the same period last year. The festival takes place over the first 18 days of June. 2017’s sales period recorded CNY 119.9 billion (USD 17.6 billion, GBP 13.3 billion) worth of transactions. While 2018’s 618 recorded CNY 159.2 billion (USD 24.7 billion, GBP 18.7 billion). JD’s home appliances sector alone breached CNY 2 billion in just 8 minutes.
Demand is growing, along with a need for quality and innovation. And shopping festivals present multiple opportunities for foreign brands to establish their brand presence and boost sales. But it also requires effort.
Previously brands would invest around 10% of their e-commerce budget towards the festival. Now, that figure has increased to at least 40%. And the 1-2 weeks of preparation is now closer to 1-3 months.
For 2017’s 618, Estee Lauder-owned MAC offered 131 shades of their lipstick, spoiling customers for choice with the largest selection of shades on T-mall. MAC also provided a ‘colour selection card’ function allowing customers to select shade and finish – in a way that recaptured the offline experience.
The result? In just 26 minutes after launch, MAC sold 10 million lipsticks.
JD upgraded their delivery strategy for 618 in order to be able to operate 27 unmanned warehouses, and deliver packages by drones and robots. In fact, JD’s service strategy for 618 was so successful that 90% of all the transactions achieved same-day or next-day delivery.
They were also able to create seamless linkage between online and offline commerce platforms by launching an “unbounded retail” initiative that incorporated physical stores into 618’s promotions.
Through this online-to-offline (O2O) campaign customers ordered from local stores through JD. Because they were granted within-the-hour deliveries, JD Daojia’s sales, their O2O platform, quintupled compared to 2017. So JD’s long-term goal to align online and offline stores is likely to influence the ways brands in China structure their approach to market going forward.
The take-away — set your strategy right
We’ve already overviewed the basics of routes to market, but other factors that contribute to a successful campaign too. You have to account for timing, expediency, and a unique market structure.
During China’s festivals, strategy is everything. Martin Suter, head of E-commerce for German beer, Hoegaarden, acknowledges that promoting during 2017’s 618 was primarily a way to drive the brand’s presence. Now, in 2018, branding is still that important.
Yeo Enhui, E-Commerce Deputy of GM Carat China, explains: “Consumers are more rational now, [so brands] need to become more strategic in how they plan for their e-commerce marketing activities so as to attract or fight in this competitive environment.”
These days, due to the magnitude of 618’s reach and the potential it promises, the investment foreign brands place into their sales strategy needs to evolve.