Importance of Offline and Online in a Post-COVID 'New Normal' as Reflected by Alibaba's Taobao Maker Festival 2020
In dire need of some action outside of our Shanghai office, my colleague Sheryl and I jumped at the chance to head to Hangzhou to check out Alibaba’s Taobao Maker Festival, an annual event showcasing China’s young entrepreneurs and emerging brands. As Alibaba had to get creative in the wake of COVID-19, we were promised a unique take on this year’s festival and wanted to see what the hype was all about.
On a normal year, TMF will see hundreds of selected merchants surrounding Hangzhou’s scenic West Lake area near Alibaba’s HQ. But this year the festival is now on wheels - 18 wheels, to be exact. The transformer-esque 18 wheeler mega-truck, which folds out into a full stage, and accompanying smaller vendor vans makes the offline pop-up a mobile caravan which will travel 3,900km over 20 days, starting in Hangzhou and hitting Xi’an, Chengdu and a final homecoming in Wuhan. Alibaba is looking to hit “college towns” with scores of curious and entrepreneurial Uni students looking to be the next smash hit on Taobao.
And what Uni student wouldn’t be lining up to try some hot dry noodle (热干面) flavoured beer, buy a tiny vintage-looking vinyl record player (appropriately named Tinyl) or picking out an ancient Chinese ‘hanfu’ style robe for their feline friend back at home? Yes, you read that correctly: hanfu for cats.
Many of these young vendors are uniquely combining recent consumer trends into their creations, which is no doubt why they were handpicked by Taobao as ideal representatives. Through these vendors we can see the rise in pet ownership, personalisation, brand crossover designs, single-person tech products (single person rice cookers) and a resurgence of cultural products, including a new spin on vintage & heritage designs (or “China cool”).
If you’re not able to make it to one of those four cities or are interested in more than the handful of vendors selected to be in the caravan, don’t fret. Taobao will be launching an online 3D simulation through the Taobao app for 4 days between August 10-14 which will allow users to create their own avatars and explore the booths of more than 150 of the selected merchants. These merchants will be spread across “kingdoms” representing categories including technology, fashion, anime and games, food, cultural heritage and novel designs.
Livestreaming remains strong despite the reopening of brick & mortar retailers
These young merchants have also been using livestreaming to continue flogging their wares during lockdown, in February alone the number of merchants on the Taobao livestreaming platform increased by 719%.
When we sat down with Chris Tung, Chief Marketing Officer of Alibaba Group, he emphasized the significance of livestreaming, particularly amongst Gen Z, saying, “A lot of young people tell me that last thing they do before turning off the light at night is watching Taobao livestreaming for half an hour and getting the deals that he or she wants. We’re talking about millions of people.”
While livestreaming is the hot topic on the lips of every China-savvy brand, and rightly so considering the value of livestreaming ecommerce alone in 2019 was ￥433.8b and yet is expected to double by the end of 2020, some of us are wondering: will the hype continue?
Chris Tung says, “Right now livestreaming is seen more as a shopping channel as a last minute purchase decision rather than finding out what’s new and what’s cool. After the pandemic livestreaming will play an even bigger role in pre-purchase exploration.” Despite consumers being able to visit their favourite stores and malls again, it’s all about efficiency. Once you get a taste of the good life there is no going back, especially for Gen Z consumers.
Reaching a new equilibrium between offline and online
This more permanent transition to digital shopping is shown through Alibaba’s Intime department store in Hangzhou, one of China’s largest. While foot traffic is 70% of what it was pre-lockdown, sales for InTime have almost fully recovered thanks to its digital push from ecommerce and livestreaming. When stepping onto the first floor you can hear the ripping of Sellotape being used to package up high-end cosmetics from behind booths such as MAC, Bobbi Brown, and Clinique. These packages are being ordered over InTime’s ecommerce app Miaojie, which delivers products direct from the mall to busy office workers within 2 hours, just in time to re-stock your favourite mascara before your next meeting.
InTime has also heavily relied on livestreaming during the lockdown period, turning 5,000 of its mall staff into livestreamers. Despite the store reopening, InTime added another 1,000 combination mall staff/livestreamers to keep the online sales going.
With O2O stores relying more on their online sales, we will see an increase in the production quality of these livestreams, as well as their hosts, as it turns into a more significant part of the decision-making process. Despite the ‘return to normalcy’ there is undoubtedly a new equilibrium in offline vs. online and how they will continue to complement one another.
