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Seasonal Upturn in Low-Tier Cities Marks Heated Competition between Chinese E-commerce Campaigns

  •   13 Jan 2020
  •    Shine Hu
  •   Post a comment

    The arrival of the Spring Festival marks the start of another significant shopping spree in China. One notable feature is that as part of the most massive migration of humans on planet earth, vast swathes of people will move from China's densely populated megacities to the lesser-known low-tier cities. To coincide with the mass exodus of people from China's largest cities, China's e-commerce platforms have geared up seasonal promotions and marketing activities.


    Last year, Taobao carried out a Chinese Lunar New Year live-streaming shopping campaign endorsed by 50 county heads. This year, the e-commerce powerhouse is doubling down on live-streaming and engaging with influencers, KOLs, and even local farmers as part of its spring festival promotions.

    Taobao launched a Fruit-Planting Activity on January 2, China's traditional Laba Festival. Consumers can "plant fruit trees" on the Taobao APP and get a free box of fruit for each tree. If family and friends are invited to plant the trees, they can receive five boxes. These free fruits are all from Alibaba's farming bases, most of which are located in China's poverty-stricken areas. This campaign amassed 220 million people's participation during the first day[1].


    Jingdong launched a "10-billion-yuan in savings campaign" during this year's Spring Festival shopping campaign, covering nearly all categories spanning from digital products to household stuff, fresh fruits, and snacks.

    Like Taobao, it introduced interactive activities to attract more traffic and engagement. For example, it launched one mobile game that offers 300 million cash for participating consumers. Thirty levels can be unlocked by logging in, browsing stores and live-streaming, and inviting other users, etc.
    Actually, Jingdong has considerable advantages in lower-tier markets as it made substantial early investments in logistics in smaller cities.


    As a rising star in China's e-commerce sector, Pinduoduo's success has primarily been driven by its activities in low-tier markets. Pinduoduo has gained a considerable consumer base in China's 3rd, 4th, and 5th tier cities and rural markets. Since December 20, Pinduoduo has been cooperating with 300,000 merchants and nearly 1,000 agricultural and sideline brands to launch the "Spring Festival Shopping Campaign jointly". Group buying is a prominent piece of Pingduoduo's strategy. For example, it has cooperated with leading fruit merchants to launch extensive scale group promotion of Chilean cherries, with participants exceeding 10 thousand.

    Pinduoduo data shows that this year, 1st tier cities such as Beijing, Shanghai, and Guangzhou remain the major consumption group of Chilean cherries, but the growth rate of consumption in 3rd and lower-tier cities is much higher[2].


    Suning has been expanding into lower-tier markets. According to statistics, by the end of 2018, Suning retail cloud(a smart retail platform for county and town markets) had 2,000 stores, and by the end of 2019, the number had expanded to 4800[3].

    Similar to Taobao's "fruit tree planting" and Jingdong's level-based game, Suning also launched a "whale feeding" activity to attract engagement, with 2 billion in reductions and bonuses provided to consumers. Suning's self-built logistics network means it is also able to give a "24-hour delivery" service for people in the counties, townships, and rural areas.

    Disclaimer: All images used in this article are from the internet.


    [1] 220 Million People Participate in Tmall Fruit Tree Planting Activity
    [2] Pinduoduo New Year Festival Targets at Imported Fruits
    [3] Alibaba, Jingdong, Pingduduo Compete for 2020 Spring Festival markets

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    Research analyst at ChemLinked, focusing on market and regulatory updates of imported products in China, mainly covering food and cosmetics.

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