“Double 12” has ended and “Good Price Festival” has begun, what is Taotian thinking?

Taobao announced that it will no longer hold the Double 12 promotion, and will change the Double 12 promotion to the "Year-end Good Price Festival". Let's take a look at the purpose behind it~

The Double 12 shopping festival, which has been held for 11 years, will no longer appear in the consumers' field of vision.

On November 24, Taobao announced that this year's Double 12 promotion event will be officially adjusted to the "Year-End Good Price Festival" (hereinafter referred to as the "Good Price Festival"), and promotional strategies such as discount intensity and product scale have also changed.

When Double 12 was first launched, it attracted much attention and discussion because of its short interval with Double 11 and the fact that it was followed by big promotions such as Christmas and New Year's Day. After 11 years of development, consumers have become familiar with the discounts and methods of this festival, and the presence of Double 12 has turned from hot online to cold offline.

Since the beginning of the year, Alibaba has carried out the largest organizational restructuring in history, and the development focus of each performance group has also changed. Taobao has shouted out the slogan of "low price", no longer focusing on GMV, but emphasizing price power and multi-level strategies to fit the current market environment and leverage consumer minds.

As the Double 12 promotion came to an end, it was replaced by the "Year-End Good Price Festival". Taotian once again "created a festival" and attracted consumers to place orders and increase sales by emphasizing its differences in low prices and discounts.

Earlier, Taobao had launched an exclusive marketing channel "Taobao Good Price Festival" for small and medium-sized businesses during the 618 shopping festival this year, and had also placed "Taobao Good Price" on the homepage of the APP, replacing the entrance position of other channels. In addition, Taobao has also increased the supply of low-priced goods. This year, the Small and Medium Enterprise Development Center was established, raising the support for small and medium-sized businesses and low-price supply to a strategic level.

This time, Taotian wants to make some achievements in the low-price market by taking advantage of the "Good Price Festival", which has become its new strategy to break the deadlock.

1. Double 12 ends, and Double 11 no longer needs "green leaves"

Double 12 was originally established to cover the market neglected by Double 11 and to supplement the consumer demand that was not met by Double 11.

However, because platform price wars, internal competition among merchants, and consumer panic buying have been concentrated in the prime time period occupied by Double 11, all parties pay less attention to Double 12, and the discounts and marketing promotions are also weaker than Double 11.

More often, Double 12 has a reduced presence online, and is gradually releasing its vitality in offline areas, such as catering, beauty salons, and vegetable markets. At the same time, in the online field, Double 12 often plays a role in helping merchants solve inventory backlogs. When Double 11 has met the shopping needs of consumers in the autumn and winter season, merchants will sell their inventory products on Double 12.

Now, with the Double 11 battle line being extended again and again, there is no need for Double 12 to act as a supporting role anymore.

In order to seek more growth opportunities and longer time windows, the Double 11 battle line has been extended several times over the years.

In 2020, Double 11 chose to launch two sales periods, and the promotion time was extended by 3 days; in 2021, Double 11 will advance the pre-sale start time to 8 pm, so consumers do not have to rush to buy late at night; in 2022, new regulations for Double 11 were released, extending the event time to 27 days, and there will be two days of return promotions after the event ends.

In the overall schedule design of the big promotion, the space left for Double 12 is getting smaller and smaller, and it is not surprising that it was eventually cancelled.

The advantage of canceling Double 12 and replacing it with the Good Price Festival is that small and medium-sized businesses and consumers can directly prepare for the year-end promotions after the end of Double 11, including the Good Price Festival and the Double 11 Gift Season, to meet consumers' needs for purchasing New Year's goods, gifts and other products during New Year's Day and New Year's Day.

In essence, shopping festivals are a tool for e-commerce platforms to release demand. However, after the end of the Internet traffic dividend period, the expansion of shopping festivals on major platforms has slowed down, and they are facing traffic crises to varying degrees.

If e-commerce platforms do not want to continue to be troubled by slowing traffic growth, they need to promote the influence of channels such as 618, Double 11, and the year-end shopping festival to drive the platform's voice and performance growth.

As consumers' attention and interest in 618 and Double 11 gradually wane, Taobao can rely on the new Goods Festival to expand new space in the e-commerce market.

2. What is the difference between the “Good Price Festival” and Double 12?

Unlike Double 12, Taobao is trying to make the "Good Price Festival" the most critical and grand promotion node, and use it to emphasize the platform's low-price mentality to attract more consumers.

The low-price mentality of "Good Price Festival" is hidden in the name. In the past year, when Taobao emphasized the importance of cost-effectiveness and small and medium-sized businesses, the two words "good price" constituted the name of a single channel and marketing channel, and therefore appeared in the eyes of consumers many times.

The "Taobao Good Price Festival", which has a similar name to the "Good Price Festival", was featured on the homepage of the Taobao APP during the 618 promotion this year. This channel is an exclusive marketing channel for small and medium-sized businesses, mainly focusing on cost-effectiveness. The channel is filled with a large number of low-priced products, mainly daily necessities and snacks. During the 618 promotion, Meituan provided nearly one million 1-yuan products, which also attracted many users in the sinking market.

During the same period, "Taobao Good Prices" also replaced the former Juhuasuan and Youhaohuo channels, also targeting the low-price mentality, bringing together hundreds of billions of subsidies, 1 yuan zones, limited-time flash sales and other sections. Most categories of products are from white-label sources.

Whether it is canceling Double 12, launching the "Good Price Festival", or replacing the important entrance on the APP homepage with a low-price channel, it is all part of Taobao's aiming at a low-price strategy and shaping consumer minds.

From Double 12 to Good Price Festival, the name has changed, and the direction and rules have also changed. Taobao previously stated that compared with the Double 12 promotion, the discount intensity, merchant scale, and product scale of this Good Price Festival will be greatly increased.

Double 12 has never used product discounts as a promotional direction, but the Good Price Festival has adopted corresponding rules to ensure the discount strength of merchants.

According to official investment information, the platform requires merchants who sign up to participate to pass the lowest marked price and lowest post-coupon price inspection before and after the event (covering approximately 1 month) to ensure that the price during the promotion period is the lowest in the short term.

The Double 12 shopping festival serves large merchants represented by flagship stores, while the Good Price Festival plays the low-price card, targeting the main players, namely small and medium-sized merchants.

In order to increase the scale of merchants, information shows that the Good Price Festival targets small and medium-sized merchants in major domestic industrial belts, helping them to quickly create popular products and increase sales on the Taobao platform. During this year's 618, Taobao provided traffic subsidies, operation hosting, AI intelligent efficiency improvement and other assistance to small and medium-sized merchants participating in the "Good Price Festival".

The Good Price Festival is becoming a new weapon for Taobao to promote its low-price strategy and attract small and medium-sized businesses.

3. Taotian continues to change, and low prices are still its "killer weapon"

At the recent Alibaba earnings analyst conference call, Wu Yongming attended the meeting for the first time as the group CEO and further clarified the business priorities of Taobao and Tmall. Focusing on the user first, Taobao has three insistences: insisting on being the "omnipotent Taobao", insisting on the consumer classification and price power strategy, and insisting on the user value positioning of the Internet consumer platform.

Regarding product competitiveness, Wu Yongming believes that Taobao must firmly establish itself as a comprehensive platform to meet the multi-level needs of the largest consumer group to increase the frequency of purchases. This is the choice for Taobao and Tmall to maintain growth in today's competitive landscape. Taobao will also implement a multi-level market strategy and price power strategy within the APP.

The renaming of "Double 12" to "Year-end Good Price Festival" is an important step. Taobao officials also mentioned that Taobao's holding of the Year-end Good Price Festival is a continuation and enhancement of the Good Price Festival. Good products and good prices make consumers more affordable and also create greater growth opportunities for all kinds of merchants.

All this is because Taotian is eager to explore more development space through "low-price strategy" and "consumer stratification".

There is no doubt that although Alibaba has grown into a giant company spanning multiple fields such as e-commerce, cloud computing, and local life, as the core business of Taotian Group, every major decision is closely related to the development direction of Alibaba.

On November 16, Alibaba released its second quarter financial report for fiscal year 2024. The financial report shows that Alibaba's revenue during the reporting period was approximately 224.79 billion yuan, and its net profit was approximately 26.696 billion yuan. Among them, Taotian Group contributed approximately 97.654 billion yuan in revenue during the reporting period, a year-on-year increase of 4%, accounting for 43% of the total revenue.

Taobao is still Alibaba's main source of revenue, but in terms of year-on-year growth rate, it ranks second from the bottom at 4%, only higher than the Cloud Intelligence Group.

At the same time, the financial report wrote: "Customer management revenue increased by 3% year-on-year, mainly due to the increased willingness of merchants to invest in advertising, which was partially offset by a slight decline in online GMV (gross merchandise transaction volume) of Taobao and Tmall."

Taotian currently needs more business development momentum. With the goal of "user first", it should promote user growth through price factors, and then drive merchant growth and business growth, so that Taotian's performance can maintain a more steady growth.

What Taotian needs to do is to take advantage of the changing consumer mentality. A survey conducted by the China Youth Daily Social Survey Center and Questionnaire.com showed that 89.3% of the young people interviewed said that their consumption concepts have changed dramatically in the past two years, and they pay more attention to quality when shopping instead of impulsively following the trend. 95.3% of the young people interviewed felt that today's young people have become different from before in terms of consumption and have become more "smart".

While price is extremely important, product quality cannot be ignored due to the trend of rational consumption. The "low price" emphasized by Taotian is not a blind price war, but a "low price" based on cost performance.

Since the beginning of this year, Taotian has achieved a balance between low price, quality and speed by reducing logistics costs, low-price supply, and supporting merchants. For example, in terms of reducing logistics costs, Taotian Factory has set up a production warehouse closest to the source factory to ensure that the goods are delivered as soon as they are produced.

From the Good Price Festival replacing Double 12 to Taobao's emphasis on multi-level markets and price power strategies, all show Taobao's urgency for change.

The idea behind this is not to simply offer low prices to attract users, but to invest more energy and resources in supporting small and medium-sized businesses and improving the quality and efficiency of product supply, so as to gain more voice in the e-commerce market. This is the direction that Taotian hopes to see.

Author: Macka WeChat public account: Yi Ke Business