As the “Double 11” shopping festival on the Chinese mainland is coming to an end, this year’s event has seen a decrease in online discussions and a lack of enthusiasm from businesses. For both merchants and consumers, the era of the “price war” seems to be losing its momentum. According to reports from mainland media outlets, the biggest difference in this year’s “Double 11” is that platforms are no longer fiercely competing on offering the “lowest prices,” as consumers have become more rational and sensitive towards pricing, making it difficult to sustain the price war.
This year, the Tmall Double 11 Gala is not being held. This once iconic event in the Chinese e-commerce circle has come to an end this year. Reports from the Financial Investment News suggest that the disappearance of the Double 11 Gala and the reduced criticism of platform rules on social media all signify a shift in the consumption market during the Double 11 festival.
The Economic Report of the 21st Century pointed out that “the historically longest ‘Double 11’ is nearing its end, with platforms and merchants remaining quiet.”
On October 8th, Douyin E-commerce took the lead with the launch of the “Douyin Mall Double 11 Pre-Enjoy Goodies Festival,” while e-commerce platforms such as Taobao, Tmall, and JD.com started their Double 11 activities about 10 days earlier than usual on October 14th at 8 p.m. Compared to previous years, the promotional strategies and subsidies have not fundamentally changed, and both platforms and merchants are generally indifferent towards sales data.
From the initiation of the “Double 11” event by Tmall in 2009 to becoming a large-scale promotional event for all e-commerce, this shopping extravaganza has gradually evolved and diversified over the years. The biggest difference in this year’s Double 11 is that platforms are no longer fiercely competing on offering the “lowest prices.”
The price war has become “unsustainable,” as consumers are becoming more rational, and ultra-low prices are no longer driving sharp increases in sales figures. Moreover, the price war has impacted product quality, which is not conducive to the long-term survival of brands and merchants.
Reports indicate that e-commerce platforms proposing to “not compete on the lowest prices” may not be an active offensive move but rather a sign of stagnant competition.
A relevant person from the operation department of a well-known footwear and apparel brand’s e-commerce stated, “We also do not want to engage in a ‘price war.’ It has no positive impact for us because the return rate for footwear and apparel is very high, especially for women’s clothing categories. If we only focus on price, it not only reduces profits but also does not solve the core issue of inventory digestion, which is not beneficial for our brand.”
This is not an isolated case. Several clothing brand managers or e-commerce operators of renowned brands have mentioned the challenges brought by the increased return rates. One clothing brand manager mentioned, “This year, the return rate has significantly increased. Although factors like more competitors entering the market play a role, the platform’s return policy is also noticeably more consumer-friendly. This is very painful for our brand and business.”
Lao Cao has been operating a pet supplies store on Taobao for 8 years. She said, “During this year’s ‘618’ period, after deducting the full discount of 8.3% for spending 100 yuan, along with a 3% Taobao coin equivalent to 80 yuan, when additional costs like cashback, deferred payments, and compulsory shipping insurance are deducted along with shipping costs and material expenses, I end up with only 70 yuan, making no profit at all.”
The strategies of traditional merchants may rely on platforms but are not outdated. A person in charge of the e-commerce operation department of the Shuke brand mentioned that this year, consumers’ demands for quality during the Double 11 event are increasing, focusing more on product value for money and after-sales services. Major brands are also placing more emphasis on innovation and differentiated product combinations or sales policies in their marketing strategies to attract consumers.
Under the slogan of “not competing on the lowest prices,” merchants have shifted their expectations for the Double 11 event, where traffic and transactions are no longer the sole assessment goals.
According to Financial Reports, Jia Zhen, an e-commerce practitioner with over 10 years of experience, stated that if a product has a gross margin of over 50%, it can still make money through the Double 11 event. However, if the gross margin is below 30%, there is no need to participate in Double 11. “During Double 11, there is a coupon of ‘spend 300 and get 50 off,’ then with a 10% discount, adding shipping insurance and payment costs, 30% profit margins are simply unsustainable.”
Small and medium-sized merchants on other e-commerce platforms also stated that in the current competitive environment, they are losing their expectations for Double 11. As the duration of the Double 11 event extends, its value is no longer as prominent. This year, the Double 11 promotion activities on major Chinese e-commerce platforms started around mid-October, about a week earlier than last year. Zhang Da, a clothing merchant from Guangdong, noted that although the event period has been extended, it has not significantly boosted sales figures, stating, “Doing events throughout the year, whether it’s like Double 11 or not.”
Moreover, operators of women’s clothing stores on Taobao and Tmall expressed, “Both me and several colleagues around are not doing well, with only half the sales compared to last year.” This year, they noted a decrease in visitor numbers compared to last year, making operational costs higher.