Double Eleven - Brand Value Creation

Luxury fashion was on the few categories to grow during 11.11 on TMall. We estimate a low single figure growth rate for the category after the dust has settled.

However, the dynamics have shifted. From the participation of Gucci to the shifting strategies of Cartier during the festival. The increasing depth and width of discounting, and the prevalence of interest free payments as a consumer value lever.

Taking the GMV numbers published in the infosphere around the festival is only part of the picture. It’s not just about revenue growth, but also how that growth is achieved.

In the report we investigate ~60 luxury fashion and jewelry brands’ flagship stores on TMall and explore six key areas. While the full story is a blend of all the ideas we present, we believe this can help provide directional strategic insights to brands on what’s working and what’s not.

Our metrics include:

Top Product Contribution – how condensed are brand portfolios around a small set of SKUs? Are brands able to generate incremental revenues from the long tail of products?

Discount Width/Depth – how many products are on discount and what is the average price difference? Are brands relying too heavily on giving away margin to shift stock?

New Product Performance – are the products released in the run up to the festival driving revenues? Is this revenue from discounted newproducts (stock clearance) or new season collections?

Pre-sales – what is the contribution from the products leveraging the pre-sales mechanism? Do these products generate disproportionate revenues throughout the period?

Price Increases – are price increases in the run up to the festival helping to elevate the premium of brands or scaring consumers away?

Non-Price Promotions – how are brands leveraging interest free payments as a consumer value creator? Does this help drive incremental revenue growth?

Click on the right to download the report

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