As Chinese consumers’ lifestyle upgrade, their needs are also rapidly evolving, resulting in the rise of emerging shopping trends shaped by various niche groups. While these new trends present exciting, untapped product opportunities for merchants, the product development process can be both a risky and costly endeavour, given the scale of the market and the quickened pace of shifting consumer wants and needs.
Alibaba helps tackle these challenges by offering merchants consumer insights and tactical solutions to accelerate their product development to successfully meet consumer demands. As one of China’s largest e-commerce companies, Alibaba attracts an expansive group of ready-to-shop consumers with a broad range of different product listings across its e-commerce platforms. The strength of Alibaba’s platforms allows a birds-eye view of consumer preferences, which is combined with an ecosystem of tactical solutions, to enable merchants to engage directly and co-create with consumers and source suppliers to test, adapt, develop, and launch cutting-edge products.
From insight to incubation
Alibaba’s unique value in supporting and accelerating merchant’s product development lifecycle is largely enabled by Tmall Innovation Centre (TMIC). Launched in 2017, TMIC helps merchants identify new channels and strategies to tap into the Chinese market by using precise market analysis, real-time consumer insights, and product concept testing. The range of TMIC services spans from working with merchants to incubate products tailored specifically for the China market, to revamping their online flagship stores, and curating marketing campaigns.
TMIC can shorten the new product incubation cycle from 18 months to 6 months, significantly reducing development costs, and also provides merchants with tools to track monthly market trends, helping them identify and address market opportunities. It further enables merchants to interact directly with target consumers, making direct-to-consumer engagement and real-time feedback collection quick and easy.
Another innovative feature from TMIC is the simulated shopping environment on the Taobao app. This feature helps merchants to test and adjust their products based on consumer feedback before launching to market. The real-time feedback from online shoppers also helps merchants determine the best price point and messaging that will resonate most with consumers. Additionally, Alibaba’s strategic partners across its ecosystem, including raw material suppliers, designers, universities, and research houses, also provide merchants with all the necessities for a successful product development and launch.
As of November 2022, TMIC has worked with over 2,000 brands around the globe. In the 12 months up to March 31 of the same year, TMIC helped merchant partners to incubate nearly 4,500 new products.
Sweet success: How Alibaba supported Mars Wrigley’s product launch and incubation
In preparation for this year’s 11.11 Global Shopping Festival (11.11), Mars Wrigley (Mars), the world's leading manufacturer of chocolate, chewing gum, mints, and fruity confections, partnered with Alibaba to better understand new consumer preferences for confectionaries that are less sweet and identified over 200 sub-segments of pain points and frustrations, which informed the company’s ongoing product adaption and incubation efforts.
As Anya Yang, digital marketing group leader – Alibaba, Mars Wrigley, said: “Working with TMIC to incubate new products helped us reach new consumers and categories, such as people who do not typically consume chocolate.” She also added that consumer insights provided by Alibaba helped Mars innovate efficiently, continuously expand its market, consolidate mindshare among consumers, and develop new products that speak to their evolving needs and preferences.
Mars has been participating in Alibaba’s 11.11 Global Shopping Festival for 11 years and the company believes that, through targeted developed products, consumers buying during 11.11 will evolve into regular customers who a habit purchase based on need, rather than discounts – making 11.11 a great time for new products to become best-sellers.
Confirming emerging consumer trends with concrete numbers
For confirmation of Alibaba’s ability to help merchants predict and translate emerging consumer trends into product development and sales, look no further than the results from this year’s 11 Global Shopping Festival.
Take the fast-growing categories of toys, pets and pet products, sports and outdoors, and jewellery for example. Within these categories, there were 358 brands that surpassed RMB100 million (approx. $13.8 million) in gross merchandise value (GMV) and 3,434 brands surpassed RMB10 million (approx. $1.38 million) in GMV in the past 12 months. . The momentum of these categories has continued in this year’s 11.11, with the revenue of toys sold on Tmall in just the first 24 minutes of this year’s 11.11 pre-sale exceeding the amount achieved in the first hour of last year’s pre-sale.
Collectible toys showed robust performance, with the GMV for the toys category this year surpassing last year’s first hour GMV in less than half the time. Meanwhile, the GMV of emerging category designer toys grew almost six-fold year-on-year on the first day of presale, with GMV of homegrown mechas increasing more than 450%. Outdoor recreational activities for children have also gained popularity, with children’s bicycles, skateboards, and backpacks becoming top sellers.
For the pets and pet products category, the pre-sale revenue recorded in the first hour of this year’s 11.11 surpassed the full-day revenue from the first day of last year’s pre-sale, with livestreaming channels operated by 14 pet stores recording over RMB1 million in sales. Pre-sale of pet lifestyle services grew strongly, with pre-sale revenues of dog and cat toys and aquarium pets increasing by nearly 2,000% year-on-year.
Outdoor recreational activities are gaining popularity in China. On the first day of presales, orders of skateboards and rollerblades recorded a more than 10-fold year-on-year growth. Categories such as winter sports, hiking, and camping continued to proliferate. Later in the first check-out period, camping, skateboarding, and fishing’s sales more than doubled compared to that of the same period last year.
The GMV of jewellery and watch brands including Chopard, Qeelin, Graff, and Tasaki saw an increase of over 100% in the first hour of the sales period compared with the first hour last year. The first hour GMV of brands such as Bulgari, Ahkah and Messika, which joined Tmall Luxury Pavilion this year and participated in 11.11 for the first time, far surpassed their average daily GMV during non-campaign period. Among them, French jewellery brand Messika achieved first-hour GMV that was over five times more than its average daily GMV during the non-campaign period.
Meanwhile, imported products were also favoured by Chinese consumers. During the 11.11 period, from October 31 to November 11, sports and outdoors categories recorded strong GMV growth on Tmall Global. GMV of surf skateboards increased more than 30-fold year-on-year, golf equipment more than 11-fold, and cycling gear more than 450% year-on-year. Personal care and cosmetics categories also saw notable growth. GMV of luxury facial/eye masks increased more than nine-fold year-on-year, men's personal care products more than 300%, and makeup sets more than 150%.