TMTPOST -- As Alibaba prepares for its 16th Double 11 shopping festival this year, questions arise about potential consumer fatigue after years of significant promotions. However, Jia Luo, the Vice President of Alibaba Group and President of Tmall, asserts that such concerns are unfounded. He highlights several factors contributing to the ongoing excitement around the event.

Jia notes that this year's Double 11 is set against a backdrop of the longest cycle for the event. With the economy in need of a boost of consumer spending, the festival stands as a critical opportunity for consumption stimulation. Additionally, consumer behavior trends show that spending typically increases in the latter half of the year as winter approaches, particularly in clothing purchases.

To galvanize consumer confidence and spending, Tmall plans to collaborate closely with brand merchants, creating an array of quality offerings. This year, Alibaba has ramped up its subsidies, introducing a record 30 billion yuan in consumption vouchers and red envelopes, alongside significant discounts that will see top brand products priced as low as 20% of their original price.

Notably, 2024 will witness increased interconnectivity among various e-commerce platforms, according to Wu Jia, President of Alibaba’s Taotian User Platform Division. This year’s Double 11 is expected to draw the highest number of buyers in the event's history.

The significance of Double 11 extends beyond consumer engagement; it serves as a window into Alibaba's evolving business landscape. The festival not only captures consumer interest but also reflects broader trends within the company.

At Alibaba's launch for Double 11, numerous executives discussed their business priorities, with a strong emphasis on the 88VIP membership program. This focus indicates a strategic shift in how Alibaba views customer loyalty and value. Unlike the early year when Tmall Double 11 primarily showcased overall transaction volume (GMV), the current emphasis reflects a deeper understanding of consumer segmentation.

The consumer landscape has increasingly diversified, especially with the growing popularity of membership-based retail models, such as Sam's Club and Costco. These shifts have prompted Alibaba to reevaluate the value of loyalty programs.

The 88VIP program has seen substantial growth, with user numbers rising by 67% among Gen Z and total membership exceeding 42 million. 88VIP members contribute greatly to overall sales, with many top brands relying on them for a substantial portion of their revenues.

While loyalty programs gain traction, price sensitivity remains a critical concern for most consumers. Tmall's Double 11 will feature a range of promotions, including an official discount of 15% and additional offers amounting to 30 billion yuan in coupons and red envelopes. The introduction of "super red envelopes" as part of the 100 billion yuan subsidy initiative aims to further attract consumers with low prices on popular products.

While Double 11 is a celebration for consumers, it also necessitates significant investment from merchants to achieve a mutually beneficial outcome. In recent months, Alibaba has sought to address concerns related to refund policies that have caused difficulties for businesses. The company has begun to revise its refund rules to ensure a more balanced experience for both consumers and merchants, allowing for a more sustainable environment.

Starting in July, Alibaba adjusted its refund policies, resulting in a 20% decrease in refund-related interventions. This change has led to a significant reduction in the number of disputes raised by merchants, enhancing the overall operating environment for both parties.

Alibaba's primary focus for this year’s Double 11 is to reignite consumer enthusiasm and confidence in spending. By ensuring that consumers feel secure in their purchases and enabling merchants to invest without fear of unwarranted refunds, Alibaba aims to foster a vibrant marketplace.

However, Alibaba faces challenges due to shifting consumer preferences and the competitive landscape of supply. Despite being the leading e-commerce platform in China, the complexity and diversity of consumer choices create a "1+N" selection dynamic, leading to cut-throat competition among various platforms and retail models.

To address recent issues within the live-streaming sales sector, Alibaba has emphasized the need for quality control and reliable after-sales service. The company advocates for a shift towards "quality live streaming" that prioritizes expert recommendations over mere price competition.

Jia highlighted that Alibaba's approach aims for price stability rather than perpetuating a price war. The goal is to create a consensus on pricing among merchants, ultimately enhancing consumer experience and service quality.

As Alibaba navigates these changes, the company remains committed to ensuring that its platform continues to serve as a valuable space for both brands and consumers.