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Pre-11.11: How Did The 9.9 and 10.10 Sales Perform in 2018? (Part 1)

By Yi Jun

November 10, 2018

 

 

By now, brands and retailers across the globe are gearing up for the biggest sales event of the year. The 11.11 sales phenomenon is fast approaching, and the current landscape is cluttered with advertised markdowns and enticing promotions. Before this, however, brands and retailers in Southeast Asia (SEA) were prepping for something similar – the 9.9 and 10.10 sales.

The success of Alibaba, the brand that started it all, naturally led other regions to try and recreate the same success. In SEA, the 9.9 and 10.10 sales are widely adopted by big names in the industry. The approach is similar to 11.11, whereby brands and retailers would give huge discounts on September 9th and October 10th respectively.

So, how did they do?

The 9.9 Breakdown

The three largest marketplaces in Malaysia and Singapore – Shopee, Lazada and Zalora – took part in this year’s 9.9 sales. We took a closer look by zooming in the fashion category, specifically apparel and fashion accessories.

pre 11.11 9.9 sales breakdown

An infographic about 2018’s 9.9 sales amongst Zalora, Lazada and Shopee in the fashion category

The infographic above shows a comparison of the three retailers in various metrics, such as bestselling assortments, price spreads and discounting range. In order to get a closer look, the key areas are broken down below.

The infographic above shows a comparison of the three retailers in various metrics, such as bestselling assortments, price spreads and discounting range.

Sellouts

  • While it would appear that Lazada triumphed with its record-high sellout rates for its categories, the numbers suggest a different perspective.
    • A high sellout rate usually reflects high demand but could also indicate potential missed opportunities in sales.
    • Furthermore, both sellouts and replenishments are equally important to the equation, as it supplies consumer demand.
  • Shopee had a higher sellout range than Zalora, which may seem odd at first since Zalora is solely a fashion retailer.
    • However, because Shopee’s core assortments are largely focused towards electronics, home appliances and beauty products, the level of SKUs for fashion were lower  – thus has a better chance of achieving sellout.
    • The latter’s lower percentage could be attributed to a shorter time period of sales – Shopee’s 9.9 sales lasted for 14 days, while Zalora’s duration was a week shorter – or the decrease in online traffic.

Assortment

  • All three retailers had a similar bestselling assortment, albeit with a few key differences.
  • Tops were only present in Shopee and Lazada’s bestselling assortment.
  • Lazada sold more accessories: watches and sunglasses.

Pricing & Discount

  • Both Lazada and Zalora had the same sellout price range of SGD 25-50, while Shopee’s was a tier lower at SDG 0-25.
  • Shopee had the lowest average price (SDG 11.6), while Lazada had the highest (SGD 187.9). The contributing categories were tops for Shopee, watches and timepieces for Lazada.  
  • For discounts, all three retailers had different most discounted categories, but with the same depth of discount.
  • All three had the same common depth of discount range and bestselling discount range.

A similar outcome for 10.10

10.10, occurring a month after 9.9, follows the same format as its predecessor. The three marketplaces above participated in the sale as well – with similar results. In comparison with 9.9’s sale, the time frame was much shorter for this year’s 10.10 sales. All three retailers reduced the sales period considerably, which affected the sellout rate. Lazada, for example, only released a sale that lasted from 10 am to 10 pm on October 10th.

Pricing, discounting and assortment strategies also had minimal differences, which was expected, considering that the two sales were only a month apart.

What was unexpected, however, showed up when a comparison was made between the sales performance during normal periods vs non-sale periods.

Sales vs Non-Sale: It’s a Tie

The bestselling categories listed above faced similar sellout rates on non-sales timeframes as well. There wasn’t a high spike when 9.9 or 10.10 happened. It is evident that while all three retailers faced an increase in traffic, conversions did not reflect. Why?

Competition is tough

One of the main reasons for its lacklustre performance could be due to high competition. With so many other brands and retailers giving deeper and higher discounts – on the very same day – it’s easy to lose out in a sea of strong competition, especially in an already saturated retail market.

Brands and retailers could see a potential higher sellout, like Zalora, did with 10.10, but it comes at the expense of high discounts. Even if stocks are cleared, this comes with a high opportunity cost for brands and retailers.

Existing sales-driven architecture  

In general, all three marketplaces are fairly discount-driven, not just during special occasions. The current architecture of the businesses could have led consumers to shop on other platforms that seldom give discounts – as it harnesses scarcity. Retailers like Zara, for example, practice scarcity to create demand.

A different purpose

Retailers may participate in this for different reasons – not just for the sake of a higher sellout. The 9.9 and 10.10 sales may be used as a strategy to re-engage old consumers or provide a new incentive for new customers to shop with them. Furthermore, the retailers may leverage on the collective advertising for both sales to create timed shopping moods, while spreading retailer awareness at the same time.

With all that said, here comes the golden question…

How will 11.11 fare?

It can be argued that 11.11 would fare much better, as the original double digits sale has more prominence. Still, the bigger the sale, the higher the competition.

If you’re taking part in this year’s 11.11, here are a few key learnings from previous 9.9 and 10.10 sales:  

  1. Survey the competition and see what your competitors are offering.
  2. Oversee non-sales periods and find a pattern in how you discount, as discounting a lot could potentially harm your brand image.
  3. Ensure other strategies such as assortment, pricing and discounting are aligned with market expectations.

Stay tuned for Part 2, where we’ll share a complete breakdown of 2018’s 11.11 sales!

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The data above was obtained from Omnilytics, real-time market data platform. The numbers and statistics may vary, as the platform is updated every day. The time period of the information taken was between August 27th to September 9th.