Nielsen's latest research shows that consumers have great enthusiasm for the 11.11 shopping festival, with 94% of online consumers in China having participated in online shopping sprees. 18-35 year old consumers were the main purchasing force, and the most likely to make impulse purchase decisions, with 56% of online consumers born in the 1980s and 58% born in the 1990s saying they have "made unplanned purchases.”
Unsurprisingly, the Nielsen study also found 11.11 is a highly recognized online shopping event, with 81% of consumers saying they are aware of Tmall 11.11.
11.11, which occurs on November 11th each year and is China's largest online shopping day, shows that along with consumers becoming increasingly sophisticated and focused on quality when shopping, price continues to be a key decision factor for purchase. More than half of consumers (55%) have made impulse shopping decisions and a further 59% have changed their purchase plans because of online shopping festivals.
Online shopping festivals also bring huge opportunities for imported goods. Nielsen research shows that 81% of online consumers in China are interested in buying imported goods on 11.11. With increasing consumer demand, imported products have ushered in an unprecedented development opportunity in China. According to the latest data released by Nielsen at the 1st China International Import Expo held in Shanghai in early November, although imported products of different categories are in varying stages of development, many imported products are showing higher sales growth rates than domestically produced products in the same category.
For baby products, almost half (48%) of all sales in China come from imported products, and growth remains impressive at 18% year on year up to August 2018. Imported beauty care and dairy products accounted for only 5% and 3% of their total categories respectively, and are considered to be in an early stage of development in China. However, these two categories have seen explosive growth rates of 114% and 90%, respectively, year on year in August 2018, indicating a significant opportunity for further growth.
E-commerce channels play an important role in helping imported products quickly enter the Chinese market thanks to wide coverage and low barrier to entry. Nielsen research shows that the share of imported products on e-commerce platforms is much higher than the proportion of offline channels. In the food and beverage market, for example, the online share of imported beer, biscuits and milk all make up around 40% of sales in their total category. However, in offline channels, imported beer, biscuits and milk make up only about 3%, 18% and 2% of their total categories respectively.
While shopping during discount season is like a holiday for many Chinese consumers, merchants invest significant manpower and resources for shopping festivals like 11.11. From the perspective of return on investment (ROI), Nielsen research shows that the investment return rate for brand owners on 11.11 is, on average, one third of the ROI achieved on non-festival days.
Despite reduced ROI during the 11.11 shopping festival, online shopping events provide ample opportunity for brands to enhance awareness among consumers and create purchase and consumption habits that will continue to pay dividends in the months and years ahead. Shopping festivals also provide an opportunity to attract new customers through promotion, and create a window for merchants to launch new products. Tmall's data shows that 12 million new products were launched on Tmall in 2017 and more than 20 million new products have been launched in 2018. Launching new products can also help drive growth in offline FMCG sales, particularly in dairy, personal care and baby and maternity categories. In the feminine hygiene category for example, while total category growth was 9.3% in the first half of 2018, new products accounted for 34% those additional sales. In the same period, total yogurt category sales grew at 11.2% and liquid milk products grew at 7.1%, while new product launches within those categories contributed 44.6% and 45.1% of those additional sales respectively.
However, while new product launches can help manufacturers drive growth, maintaining growth over time can be challenging, and the first 100 days following a new product launch is critical as it often determines whether a product will survive. Around one out of every 10 new products succeed beyond the first year and nearly two-thirds experience sales declines in their second year.
In October of this year, Nielsen and the Tmall Innovation Center reached a strategic cooperation, releasing an omni-channel New Product Performance Index subscription solution, which monitors the performance of recently launched products in the market and offers insights so brands can make better decisions on their product innovation strategy. The joint data product is rooted in Tmall's rich online data resources and Nielsen's leading offline retail data resources, enabling brand enterprises to have a clearer picture of new product trends in the market for R&D and marketing strategy.
At the “11.11” Tmall Media event, John Burbank, President of Nielsen Global Enterprise Development and Strategic Cooperation, once again expressed the major changes that this innovative product will bring to the market:
"Nielsen has been deeply involved in the Chinese retail market for more than 30 years. No company can rival our comprehensive offline retail data and market insights. Tmall has also committed to being an omni-channel retail enabler. This collaborative solution is an FMCG innovation milestone and will offer never before seen insights on China’s omni-channel retail development. This solution is the result of our dedication to delivering the most accurate picture of the evolving China market for our clients and the industry as a whole.”
"The current omni-channel environment in China shows huge opportunity. We can see that among the 60 FMCG categories in the Chinese market monitored by Nielsen, local small and medium-sized enterprises are seeing strong growth rates of around 10% offline. That 10% represents an additional RMB 8.8 billion in offline sales growth that was added to the total market last year. This opportunity for these brands is also present in online channels. There are nearly 50,000 FMCG brands on the Tmall platform, of which many are small and medium-sized enterprises. This solution from Nielsen and the Tmall New Product Innovation Center will also allow us to investigate deeper into the demands of consumers, understand emerging innovation trends, and drive product innovation and marketing strategy through omni-channel big data insights," Burbank concluded.