Tmall 3C home appliances double 11 explosion: brands and platforms rush to
Latest update time：2024-10-29
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As the overall market growth slows down, how to find new growth has become a question that all home appliance and digital companies have to think about. Embracing online may be one of their few options.
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Author | Liu Wei
Editor
| Lin Juemin
This year's "Double 11", with the addition of government subsidies, digital products and home appliances became the focus of competition among major e-commerce platforms. Among them, Tmall, with its "home advantage", achieved a "good start" and was the first to achieve explosive sales.
At 8 pm on October 14, Tmall opened pre-sales for Double 11. In the first hour of pre-sales, sales of 42 digital brands including Xiaomi, vivo, DJI, and Fuji doubled compared with last year, with DJI’s first-hour sales increasing by more than 560% year-on-year.
Driven by the pulling effect of government subsidies, home appliance brands also saw a significant increase. In the first hour, Tmall's large home appliance transactions increased by 765% year-on-year. Brands such as Haier, Midea, and Little Swan quickly exceeded 100 million.
At 8 pm on October 21, the official sales phase began. The strong momentum of Tmall's home appliance and digital products category continued, with sales of many 3C digital brands exceeding 100 million yuan. Among them, Apple's transaction amount exceeded 1 billion yuan in just 5 minutes after the sale started. Sales of 3C digital brands such as Huawei, Xiaomi, vivo, Samsung, and Sony also quickly exceeded 100 million yuan.
The driving effect of government subsidies is obvious, but it is not the whole story. It can be seen that Tmall is using this round of subsidies to expand its advantages in 3C digital and home appliances and home furnishing categories.
According to statistics from the data agency Jiuqian, in the first phase of Tmall's Double 11 this year, the market share of home appliances and 3C categories in the "three major platforms" were 45.2% and 46.7% respectively, with explosion coefficients of 268% and 260% respectively, exceeding industry expectations.
In fact, as early as this year's 618, digital and home appliance brands on Tmall had already shown signs of explosion. According to consumer research organization Lijin, citing Magic Mirror Insight data, since May this year, home appliances and 3C categories on Taobao Tmall have increased by 74.2% and 90.1% year-on-year respectively, ranking among the top domestic e-commerce platforms in terms of growth rate. The significant growth in scale is inseparable from the willingness of brands to increase investment in the Tmall platform.
The collective explosion of home appliance and digital brands on Tmall is not only due to the dual driving effect of the platform subsidies and government subsidies during this year's Double 11, but also the inevitable result of home appliance and digital brands embracing the online world and using Tmall as the main platform for explosion. This is a two-way journey of mutual achievement.
01
Facing growth bottlenecks, home appliance and digital brands embrace online breakthroughs
GfK China's global monitoring data shows that the global (excluding North America) home appliances and electronic consumer products market size in the first three quarters of 2023 was US$586 billion, a year-on-year decline of 4.7%. The Chinese market performed slightly better, achieving an overall positive growth of 4.1%. Among them, consumer electronics, large appliances, and small appliances increased by 2.9%, 2.1%, and 5.4% year-on-year, respectively, and the overall growth rate slowed down.
The incremental market of home appliances is closely related to the real estate market. Recently, stimulated by a series of favorable policies from the state, the real estate market has gradually warmed up. But overall, it will still take time to return to the booming situation of previous years. With the real estate market still in a steady recovery stage, the home appliance industry is more of a competition for the existing market.
The digital 3C industry is also facing a similar dilemma. With the popularity of products such as smartphones and personal computers, the market has gradually become saturated. Consumers' demand for new devices has weakened, leading to a slowdown in the industry's growth. Taking mobile phones as an example, third-party data shows that the average replacement cycle of smartphones worldwide will reach 51 months (4.25 years) in 2023. In comparison, in 2018, this figure was only 22 months (1.8 years).
In order to break the deadlock, domestic home appliance and digital brands have launched high-end strategies in the past two years. On the one hand, they hope to "make up for volume with price" and make up for the decline in sales through higher selling prices and profits; on the other hand, they hope to stimulate consumers' demand for replacement through updated functions and experiences.
Take Haier as an example. In recent years, it has made great efforts in high-end brands such as Casarte and Fisher & Paykel and achieved remarkable results. According to Haier Smart Home's financial report, in the first half of 2024, Casarte ranked first in the retail sales share of refrigerators, washing machines, air conditioners and other categories in the high-end market.
Thanks to its successful high-end strategy, in the first half of fiscal year 2024, Haier Smart Home's net profit attributable to shareholders exceeded that of Midea and Gree, with a year-on-year increase of 16.3%. It is the only company that has maintained double-digit growth in net profit attributable to shareholders since 2021.
However, the high-endization of products is highly dependent on technological innovation, and brands need to invest a lot of resources in research and development. As technological development enters a bottleneck period, innovation becomes increasingly difficult, and product differentiation becomes very difficult.
Take the mobile phone industry as an example. In the past few years, major mobile phone manufacturers have been aggressively focusing on imaging and folding screens. Last year, flagship new products such as the vivo X100 ultra were widely praised for their outstanding imaging capabilities. However, this year, new products released or about to be released by several major brands have been accused to varying degrees of "limited progress in imaging capabilities, and even regression in 'stacked materials'."
At the same time, although Huawei launched a "monster" such as a three-fold screen mobile phone and won a lot of applause. But overall, foldable screen mobile phones have not yet fully opened up the market and are still just a niche attempt.
The combination of multiple factors has led to the current situation of slowing growth in the home appliance and digital product market. Under this situation, how to find new growth has become a problem that all home appliance and digital product companies have to think about. Embracing online may be one of their few options.
According to data released by the National Bureau of Statistics and the National Development and Reform Commission, from January to August this year, the total retail sales of consumer goods reached 31,245.2 billion yuan, a year-on-year increase of 3.4%, of which online retail sales reached 9,635.2 billion yuan, a year-on-year increase of 8.9%, a growth rate higher than the overall growth rate of total retail sales. In other words, the online channel has a more obvious pull effect on overall consumption.
It is for this reason that the "Action Plan to Promote Large-Scale Equipment Updates and Consumer Goods Trade-in" issued by the State Council proposed "supporting home appliance sales companies to jointly carry out trade-in promotions with production companies and recycling companies, setting up online and offline home appliance trade-in areas, and providing discounts to consumers who exchange old home appliances for energy-saving appliances", which puts online channels in an unprecedented important position.
Stimulated by favorable policies, all major e-commerce platforms set up special sessions or activities for national subsidies during this year's Double 11. There are even a large number of national subsidy strategies for e-commerce platforms on social media such as Xiaohongshu.
According to Tmall statistics, the growth rate of brand merchants in the home appliance, home furnishing and home furnishing categories (currently, these three categories belong to the same industry on Tmall) that participated in the government subsidies and Double 11 discounts was 102% higher than that of the same industry. Among them, the growth rate of brand merchants in the small home appliance category that received new subsidies was 424% higher than that of the home appliance, home furnishing and home furnishing industry, and the growth rate of home furnishing brands was 146% higher.
This "counter-cyclical growth" is closely related to the brands' increased investment in the Tmall platform.
This year's Double 11, government subsidies and Tmall's full-reduction activities, 88VIP coupons, and category coupons promotions can be stacked. Many 3C digital and home appliance brands have also added their own discounts, adding more layers of discounts through brand coupons, single product coupons and gifts.
Panasonic told Leifeng.com that on this year's Double 11, the overall performance of Panasonic brand small appliances on Tmall increased by 500%, and microwave ovens, steamers and ovens, etc. all became popular products.
In addition to government subsidies, there are also 88VIP consumer coupons and trade-in platform subsidies provided by the Tmall platform. Panasonic has also invested in offering instant discounts on some products and giving high-value gifts to Tmall consumers, so that the actual price of the products can reach 60% off the original price.
Through the superposition of three investments, brand merchants are able to attract more consumers through lower prices.
A Panasonic official said: "The platform actively promotes and provides a lot of on-site and off-site resources and traffic support for government-subsidized products... Tmall also has high subsidy investment. Combined with the fact that the 88VIP mentality of Tmall Double 11 has penetrated into consumers, plus government investment, Tmall's high exposure and crowd quality are the most suitable."
02
Taking advantage of the situation, Tmall becomes the first choice for brands to explode online
As mentioned above, as the market becomes saturated and the overall growth rate slows down, home appliance and digital brands hope to stimulate consumers' demand for replacement by upgrading their products. Under this strategy, brands will naturally prioritize high-net-worth users with stronger paying capabilities. And Tmall is undoubtedly the e-commerce platform with the largest number of high-net-worth users in China.
At the 2024 Tmall Double 11 press conference, Xiuxun, general manager of Taobao Group's 88VIP business, revealed that over the past year, Taobao 88VIP has continued to maintain double-digit growth, with the number of post-00 users increasing by 67% year-on-year and the membership scale exceeding 42 million, making it the largest paid e-commerce membership in China.
The rapid growth of 88VIP members has significantly boosted Tmall’s brand business. Data shows that the scale of 88VIP’s annual partner brands has increased by more than 300% year-on-year, and more than half of the business of top brands is contributed by 88VIP.
Take Procter & Gamble Group as an example. Since its in-depth cooperation with 88VIP in 2023, the number of new 88VIP customers of its more than 20 brands has increased by 57% year-on-year, and sales to 88VIP members have grown 30 percentage points faster than that of general users.
For brands, whether they are positioned as high-end or affordable, they ultimately need to use new products as a real hook to connect with users and stimulate demand. Tmall's huge group of high-quality users has laid a good foundation for home appliance and digital brands to promote new products. However, in this era, whether a good wine will not be popular if it is not well known, whether a new product can be quickly popular also depends on whether the platform can provide enough operational tools and strategic support.
This year, Tmall has made new products one of its key strategies and has further improved its ability to make new products a big hit. In the TopTalk in April, Tmall clearly stated that it would create 5,000 new HeyBox products and 100 new brands with sales exceeding 100 million by 2024. A clear direction is that Tmall will upgrade the entire process of new product launches, covering the time period before and after the launch of new products, so that new products can be connected with consumers until the transaction is completed.
After a series of combined efforts, Tmall's mindset of brand new product launches has been further strengthened. During the Double 11 period, more than 35 million new products from various industries chose to be launched on Tmall, and hundreds of big-name "super new products" were exclusively launched on Tmall.
The exclusive launch of new digital products has unique significance for the platform. Even if they are released one day in advance, they can attract more traffic and sales.
On October 29, Xiaomi's new flagship Xiaomi 15 series mobile phone was officially released. The first batch of Xiaomi 15 series will be launched on Tmall, and will be shipped to Tmall users first. Consumers will be able to see the logistics as soon as after the press conference, and the products will be shipped on the platform one after another.
On the first day of Tmall Double 11 pre-sale, vivo's annual flagship X200 series was launched and simultaneously launched on Tmall. The first batch of vivo X200 series was shipped to Tmall users on October 15. In addition, OPPO Find X8 series, DJI WM234 and other new 3C digital products will also be launched on Tmall.
High-net-worth user groups and the ability to make new products a big hit are the underlying driving forces for home appliance and digital brands to embrace Tmall, and the national "old for new" policy has accelerated the pull effect on consumption. In this process, Tmall also seized the opportunity and actively took over the traffic.
The Ministry of Commerce's national home appliance trade-in data platform shows that as of October 15, 20.667 million consumers have applied and 10.134 million consumers have purchased 14.624 million units of eight categories of home appliances, enjoying 13.17 billion yuan in central subsidies and driving sales of 69.09 billion yuan.
Driven by government subsidies, the sales of home appliances and digital products on various e-commerce platforms have increased to varying degrees. Tmall took advantage of the situation and launched the most powerful Double 11 subsidy in recent years. At the Tmall Double 11 press conference, Tmall President Jia Luo introduced that this year's "Double 11" Taobao Tmall will issue 30 billion yuan in consumer coupons and red envelopes. At the same time, the government's old-for-new subsidies will be combined with the "Double 11" platform discounts for the first time.
The double subsidies have brought extremely impactful pricing power to home appliances and digital products on the Tmall platform.
Taking the iPhone as an example, the original price of the 128GB iPhone 16 is 5999 yuan, but after using the 500 yuan Tmall surprise coupon, the price is only 5499 yuan. The popular model iPhone 16 Pro is superimposed with a 500 yuan Tmall surprise coupon, and the price is 7499 yuan, and you can also enjoy 12 interest-free installments. In addition, by exchanging old iPhones for new ones at the Tmall Apple Store official flagship store, you can enjoy a subsidy of up to 1100 yuan for the old phone.
From 618 to Double 11, the continued strong growth momentum of digital and home appliance brands on Tmall shows that more and more brands are considering Tmall as a core platform to promote brand explosion. This choice is not only the result of Tmall's continuous investment and active embrace of brand merchants, but also the bets and investments of brand merchants on the platform. The outstanding performance achieved by the two-way rush has also injected a shot of adrenaline into many brands and merchants who are still struggling to explore.
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