The Taobao year-end good price festival will officially start at 8 pm today. Previously, "Taobao cancels Double 12" became a hot topic on Weibo, sparking discussions among netizens. However, in fact, Taobao Double 12 has arrived as scheduled, with only the name changed to Taobao's year-end good price festival.
Taobao stated that compared to the previous Double 12 promotion, this year's heavyweight Taobao year-end good price festival will significantly increase its discount intensity. The new name of the "year-end good price festival" seems to carry the ambition of Taobao to warm up the Double 12 and strengthen its low price mentality to attract more consumers.
Will consumers be more willing to pay for the renamed Double 12? How do businesses view this "year-end good price festival"? Behind the name change is the gradual decline of the Double 12 brand, but whether the year-end good price festival can fulfill the expectations of the platform and merchants still needs to be questioned.
Will a good price festival be cheaper?
Will Taobao Double 12 become cheaper this year after renaming to year-end good price festival? Regarding this, Taobao's statement is that compared to previous Double 12, the year-end Good Price Festival will have a significant increase in discount intensity, product scale, and other aspects. In addition to Taobao merchants, Tmall brand merchants will fully participate in the year-end good price festival this year. The official discount for products starts at 8.5%, and there is no need to make up the order. With just one click, you can get a discount. In addition, there is a 30% discount for every 200 or more cross store purchases, which lowers the threshold for making purchases.
In fact, the Good Price Festival came from this year's 618, and Taobao set up a Good Price Festival sub venue for the first time during the 618 promotion. During the 618 shopping festival, Alibaba Mama and Marketing PR President Liu Bo of Taotian Group mentioned in a media interview that Taobao did not even look at GMV for this event, but rather focused more on the number of consumers and the number of orders they purchased at the venue. He revealed that this activity brought more users and orders from county-level and below markets to Taobao on 618, opening up a certain space. "We will continue to do it in the future.".
From the price power strategy of Taobao this year, it can be seen that low-priced products have indeed gained more platform traffic support in recommendation algorithms, exclusive entrances, and other aspects, and have also brought some increment to the platform. Data shows that during the Tmall Double 11 period, a large number of Taobao and Tmall merchants relied on price power to obtain transactions. Taobao added more than 20 million users and over 140 million orders in the third tier and below markets. On the day of Double 11, the transaction volume of "billion yuan subsidies" increased by 7 times year-on-year.
In short, this year Taobao advocates low prices for merchants. When it comes to renaming on Double 12, clothing and accessories merchant Li Xin (pseudonym) believes that this is a manifestation of Taobao's efforts in "low prices". Today's buyers want good products at low prices, and Taobao officials will clearly send messages in the background to remind merchants to lower prices, lower prices, and only give them more traffic. He revealed that on Double 11 this year, Taobao will set prices when merchants register, and they must register based on the lowest transaction price within three days, otherwise they will not be able to participate in the event, "Some merchants may use third-party discount tools to lower prices in order to boost sales in the early stage, such as offering a 19.9 yuan promotional campaign for products priced at 30 yuan in advance. However, the system will now capture and treat 19.9 yuan as the lowest price. The next promotion will only be lower than 19.9 yuan, otherwise it will not be available."
The low price has brought about some increase in sales, but as the year-end Good Price Festival approaches, Li Xin's willingness to lower prices is not strong. "Sales have increased but profits are not high, coupled with an increase in return rates, profits are very poor." Li Xin is not optimistic about the brand effect of the "year-end good price festival". In his opinion, the popularity of this event is not as good as Double 11, and even if you lose money, you cannot sell it. The pricing of goods still needs to focus on ensuring profits, "as much as you can sell."
Can ordinary consumers easily buy cheap products during Taobao's year-end good price festival? Li Xin is not sure. He revealed that during this year's year-end Good Price Festival, merchants did not sign up for card prices, and his products were all priced according to the original prices. According to news from Taobao, during the year-end Good Price Festival, Taobao will increase its support for the industrial belt, releasing for the first time the top ten gold medal star production areas and the top ten emerging star production areas. From this perspective, industrial belts and factory stores may become the protagonists of the "low-priced goods" during the Taobao year-end good price festival, and the discount intensity of products on the entire platform is likely to be difficult to compare to Double 11.
"From a brand perspective, participating in the Taobao year-end good price festival and previous years' Double 12 may not have much change. The main reason for the change may be the significant decrease in platform traffic." A brand sales manager told a reporter from First Financial News, "Many brands have not completed sales on Double 11 this year, and they will definitely need to make up for it." However, he also revealed that the pricing mechanism of the year-end good price festival brands will be slightly different from that of Double 11. ", Although Taobao emphasizes the price power of the year-end good price festival, the brand's price reduction space is already very limited.
The Struggle between "Double 12" and "Year end Good Price Festival"
Why did Taobao rename Double 12? E-commerce analyst and founder of Dolphin Think Tank, Li Chengdong, analyzed to First Financial reporters that Double 12 is just a time definition and has been renamed as the "year-end good price festival". The main consideration is that the brand value of the "year-end good price festival" can be riveted on low prices to attract users. Although it's just a name change, it also means that the attractiveness of Double 12 as a major holiday brand has weakened. "Of course, changing the name may not necessarily improve the situation much," Li Chengdong added.
The effect of renaming on Double 12 is not optimistic for merchants. A small and medium-sized Taobao merchant told reporters, "It will definitely have an impact on sales. Everyone thinks that Taobao's Double 12 has been cancelled, and other platforms have gone to other platforms under the banner of Double 12." Currently, "12.12" has appeared on the app icons of JD.com and Pinduoduo, while Taobao only places "year-end good price festival" on the app icons. The reporter asked multiple consumers, all of whom said they had noticed the news of the cancellation of Double 12, but were not aware of the Taobao Good Price Festival. It is reported that the upcoming Taobao Good Price Festival will serve as a long-term IP operation and continue to increase investment. However, before the brand of the "Taobao Good Price Festival" has accumulated enough popularity, it seems that Taobao is too hasty to let it replace the Double 12.
The full participation of brand merchants in the year-end Good Price Festival will be a major breakthrough for the "Good Price Festival" brand. Previously, most of the participants in the 618 Taobao Good Price Festival sub venues were small and medium-sized Taobao merchants. With the upgrade of the "Good Price Festival" to the "Double 12 Main Venue", most brands have also joined the "Good Price Festival" as a result.
"From a rational perspective, I believe that Taobao's renaming of the Double 12 is a change seeking approach, and I respect their spirit of innovation." The brand leader mentioned above told a reporter from First Financial that in his view, this is also a helpless move. In the situation where Alibaba is being snatched by other platforms with a "low price mentality", it is necessary to constantly try to break through the situation. He expressed "cautious optimism" about the effect of renaming "Double 12".
Can Taobao platform accelerate the establishment of users' low price mentality? With the high growth of Pinduoduo's domestic e-commerce business and Pinduoduo's US stock market value surpassing Alibaba for the first time, this has become an increasingly urgent issue for Taobao.
From this year's Double 11 to the year-end Good Price Festival, an obvious change is that Taobao is vigorously promoting the promotion method of "one item reduction" in the big promotion. After the Double 11 shopping festival launched its first large-scale official discount on the basis of full discounts, with one item discounted and no need to make up the order, the "year-end good price festival" further launched "official discount products starting at 8.5% off.".
Behind the changes in "bargaining" and "reduction", Taobao is also making more attempts to enhance the attractiveness of the big promotion brand.
During this year-end good price festival, Li Xin's store only participated in full discounts. Most of his store's product prices were in the tens of yuan, and he judged that buyers would prefer to scrape together more. "Buying a bunch of items in seven or eight, using cross store full discounts feels much cheaper for them. If you pay the price, you don't feel like you've saved much money for yourself."
"We completely agree with the gameplay of 'vertical reduction'." As the sales manager of an expensive beauty brand, Wang Rui (pseudonym) has a different view. In her opinion, many consumers will try to make up for discounts, use 88VIP category coupons to make up for orders, and return goods, which is a false prosperity for the brand. High priced products are directly discounted, and the discounts are also obvious. This year's year-end good price festival, her brand not only participated in full reduction and bargaining, but also actively participated in one piece reduction.
"For members like our 88VIP, those with high mischievous values, and even those who make very high annual purchases on Taobao and Tmall, you will find that they prefer the form of full discounts more because they buy a lot of things and cross category items. Through full discounts, they can get more discounts. However, for users with low purchasing activity, they prefer simplicity and are more suitable for direct discounts." This year's 618 period, Liu Bo once analyzed this and revealed that in terms of the pace and gameplay of the big promotion, Taobao needs to further optimize it based on customer feedback and results.
Previously, Dai Shan, CEO of Taotian Group, mentioned Taobao's pricing strategy during an Alibaba Q2 earnings conference call, stating that Taobao needs to differentiate between different goods and operate separately based on industry categories and sales forms, in order to comprehensively enhance the price competitiveness of promotion and daily sales.
In fact, whether it is the replacement of Double 12 and the year-end good price festival, or the changes in gameplay of "bargaining" and "full reduction", or the strategy of Taobao to distinguish different pallet operations and improve price competitiveness, behind them are Taobao's desire to overcome the decline of major promotions and the lack of "low price mentality" in daily sales. As the first platform to propose and cancel Double 12, Taobao remains the one that embraces change and constantly innovates. But can a hastily arrived "year-end good price festival" open up a dilemma for Taobao? Perhaps some cautious optimism is needed.