Show Notes
Topics Discussed and Key Points:
● Trends that shaped consumer behaviour in 2021
● How different categories have fared over the past year
● How consumer trends have evolved in the past 18 months
● Sectors to lead the charge in China’s economic growth going forward
● Which categories are predicted to be successful on Singles’ Day
● New tactics brands will use aside from discounts
● How important it is to have inventory on the ground for Singles’ Day
● How the impact has impacted manufacturing and logistics
● Potential long-term effects of this year’s 11.11
● How brands are preparing for fallout due to supply chain issues
Episode Summary:
Today on The Negotiation, we speak with Jacob Cooke, co-founder of WPIC Marketing and Technologies, to get his pre-and post-11.11 insights and predictions. As 2021 comes to a close, Jacob does a deep dive into the consumer trends that have emerged in China over the past year.
The biggest factor that rippled out into all aspects of commerce and consumer behaviour in 2021 was operational continuity. Both buyers and sellers are no stranger to having to navigate ever-changing logistical challenges in the market, and this has led to increased vigilance and meticulousness in the way people purchase.
Online retail quickly became the preferred way to shop, the health and wellness category has soared, and even high-end fashion has seen a resurgence over the past year as brands have finally learned to adapt to the limitations brought about by COVID-related restrictions and other obstacles. On the other hand, mother and baby brands have fallen due to lower birth rates. Most other categories, Jacob observes, have seen linear growth.
The result of these adaptations is that brands have now gotten their predicted sales down to a science. They do not expect to overperform or underperform on Singles’ Day as big data and machine learning have given companies the ability to calculate the precise amount of inventory they would need to prepare in time for 11.11.
“Nothing is truly made in its country of origin,” Jacob reminds us. As manufacturing and logistics continue to experience complications, inventory will become increasingly precious. Companies will largely be playing on defense to preserve the inventory they have along with finding more creative solutions to moving product beyond discounts.
Key Quotes:
“In general, when we look at the history of 11.11 (I think we’re at year 12 now), a lot of the growth in those early years was from DAU (daily average users) and MAU (monthly average users). A couple of years ago, Tmall hit that $900 million mark [and] reached saturation in the market. Growth then started coming from increased spends between that $900 million but also from broader and broader categories.”
“This 11.11 may potentially be smaller than last year’s 11.11 due to the supply crunch. It’s going to be the biggest issue. I don’t think it’s been in the press nearly enough. [...] This is not a new problem. This has been going on for several months. I think now people are starting to notice it with empty shelves; but, it’s no different anywhere in the world. Global supply chains are extremely complicated.”
“The Chinese eCommerce system is very public. Those comments are always there. The ratings are incredibly important. And it all feeds back into the search algorithm. So, you have this monstrous platform, but you’re also up against a ton of other brands. Customer feedback is incredibly important. Your reputation is everything. You don’t ever want to misrepresent the products that you’re selling. You want to be as accurate as possible. And if there are disadvantages to your product, you want to be clear about that, too, and provide reasons. You don’t want any consumer to be surprised about the item that they receive at home versus what they think they’re purchasing online.”