China’s “Double 11” event pulls in a record-breaking $137 billion with L’Oréal and other overseas brands staging a comeback
China’s mega sales event “Double 11”, which originally began as “Single’s Day” for being held on November 11 (or 11/11), had its duration extended this year. The singles’ shopping spree kicked off on November 1st and the battle between brands was fiercer than ever before. Overseas brands such as Estée Lauder, L’Oréal, and P&G that were starting to be pushed out by Chinese brands staged a comeback. Japanese brands such as Shiseido, Kao, and Ya-man also made their own strides forward.
According to Pingan Securities, the overall GMV (Gross Merchandise Value) of all platforms across the duration of Double 11 this year (November 1 to 11) surpassed 900 billion yuan (US$137 billion). The top platform was Alibaba Group’s Tmall, which made 498.2 billion yuan (US$76 billion), a 26.1% increase over the previous year, and combined with Taobao (also of Alibaba Group) their share was 59%. In second place was JD.com, whose GMV was 271.5 billion yuan (US$41 billion) — an increase of 32.8% — and whose share was 26%.
Cross border e-commerce also did well. The GMV of Tmall Global as of midnight on November 11th was an increase of 47.3% over the previous year. 2,600 brands participated in the event for the first time, and 1.2 million items made their debut.
Estée Lauder in the first place, while Shiseido was eighth
Skincare items made 75.5 billion yuan (US$11.5 billion) during Double 11, a 45% increase from the previous year, while makeup items recorded sales of 15.4 billion yuan (US$2.3 billion), a 38% increase. Beauty products were big on Tmall as well. Of the 108.2 billion yuan (US$16.5 billion) of GMV earned on the platform between November 1st and 3rd, the largest product category was cosmetics which made up a 20.1% share. Furthermore, the ranking of Double 11 cosmetics sales on Tmall by brand, as provided by Alibaba-owned media site Tianxiawangshang, was as follows:
1st: Estée Lauder
2nd: L’Oréal Paris
3rd: Lancôme
4th: The History of Whoo
5th: Olay
6th: SK-II
7th: Sulwhasoo
8th: Shiseido
9th: Winona
10th: La Mer
In the first place, Estée Lauder had sales that surpassed 2.4 billion yuan (US$366 million). In an affirmation of their strength, three major global companies — Estée Lauder, L’Oréal and P&G — each had two brands in the top 10. South Korean brands were down to two. However, a striking difference from previous years was the performance of Chinese brands. Although in recent years they had made remarkable progress, only Winona made the top 10 this year. 2019 featured four Chinese brands in the top 10, while 2018 had five, which is why this year appeared to be a sudden drop-off.
For Japanese brands, only Shiseido made the top 10; however, beauty appliances from Japan did see solid sales. According to Chinese research firm CBNData, it was thanks to live-commerce sessions featuring popular KOL (Key Opinion Leader) Viya on the 10th that led to Ya-man’s facial appliances reaching their estimated revenue of 41 million yuan (US$6.25 million).
Japanese brands also stood out on cross border e-commerce platforms again this year. Indeed, Japanese products made up the most imports on Tmall Global as of 4 pm on November 11th. In the sales ranking of imported (overseas) brands, Ya-man came in the first place, Kao in fourth, Shiseido in fifth, and Dr. CI:Labo in fifteenth.
Large discounts offered by overseas brands
As to the reason overseas brands have been able to stage such a comeback, Chinese media https://mp.weixin.qq.com/s/fJMVALlbkhe7Nf0VSYd6qg suggests that compared to previous years, they’ve put a lot more effort into offering discounts. In this year’s Double 11, although 250,000 brands and 5 million stores participated, there were up to 14 million discounted items — 1.4 times from the year before and a record high.
Certain benefits such as receiving another for free on buying one of two of the same product and the distribution of coupons are indispensable elements of sales events in China. However, this year overseas brands offered considerable discounts through live commerce. Discounts of over 50% were not uncommon. For instance, Estée Lauder sold eye cream with virtually 50% off and Shiseido sold their beauty concentrate Ultimune with 60% off. Olay’s facial mask was apparently sold with virtually 77% off. Back in 2018, the largest discount was around 20%, so it’s clear that this was a heated discount battle.
One of the main reasons for increased sales has been live commerce. According to iiMedia Research, the number of live streams that occurred on Tmall during the sale period surpassed 100,000, the total number of viewers surpassed 300 million, and the volume of business was over six times the previous year. Tianxiawangshang reported that there were close to 500 streaming rooms that made over 10 million yuan (US$1.5 million) and 33 that made over 100 million yuan (US$15 million).
Although Chinese brands had a lesser presence compared to their overseas counterparts, their sales performance was far from bad. Winona, the only Chinese brand to rank in the top 10 cosmetics sales on Tmall, exceeded 700 million yuan (US$106.7 million) in sales — over two times their Tmall sales of the previous year.
Also, the Chinese brand to attain the most cosmetics sales on the final day on the 11th was Jala-owned Chando. Within an hour, their sales on their flagship Tmall store reached 100 million yuan (US$15 million). Their vegetable-based water retention facial mask also sold 40 million units.
Another brand that did well was Perfect Diary. The brand’s operating company Yatsen Holding just recently listed on the US Securities and Exchange Commission on November 20. Perfect Diary sales on Tmall exceeded 600 million yuan (US$91.5 million) and it had the top sales within the makeup category.
Florasis, introduced in a previous article, also did well. Their sales on Tmall surpassed 500 million yuan (US$76 million) — a 259% increase from the previous year — plus they were second place in the makeup category. They also made the most money from overseas sales between the 1st and the 3rd of November out of the Chinese brands, with consumers from over 100 different countries and regions making purchases via Tmall.
The costs involved in rolling out promotions for Double 11 tend to be enormous — brands pay big for exposure on platforms, partner with popular KOL, and conduct countless live-commerce sessions. Even so, the reason overseas brands had such competitive prices this time was likely a move mindful of the fact that Chinese brands have always tended to set their prices low.
Western markets still seem a long way off from recovering from the pandemic. Thus, for global brands, a Chinese sales event like Double 11 makes for a huge PR opportunity. With these overseas brands engaging in a price war in order to increase their presence in China, and Chinese brands continually trying to expand their foothold, it will be interesting to see how the market share and competition will look like in 2021.
Text: Ching Li Tor
Original text (Japanese): Team Roboteer
