Keywords

1 Introduction

The date November 11th was once a special day for the singles – namely “singles day”. After several years of marketing operation, now it is a carnival belongs to Alibaba. The day 2012 November 11th would remain immortal in the annual of China’s electronic commerce history forever, even more emerged a unique phenomenon named as Taobao “double eleven” phenomenon. Using the half off promotions strategy, the sales of Alibaba’s Taobao and Tmall through Alipay amounted to a total of 19.1 billion Yuan. In this carnival, some of small undistinguished brand from traditional off-line retail market and some Tao-brand from Tmall achieved many impressive achievements which might be unattainable for many famous first-line brands of the traditional retail market. The single-day sales of 217 shops from Tmall exceeded 10 million each, five of which shops daily sales exceeded billion.

While the traditional off-line retail industry is bleak and the competition of electronic business is getting tougher, why these have very inconspicuous small brands can be able to achieve such remarkable achievements? In this paper, the author reflects on the rise of small brand under E-business environment through ‘Double Eleven’ phenomenon and the way of further development.

2 Rise of Small Brands and Tao-Brands Under E-business Environment

2.1 The Rise of Taobao and Tmall

On the background of global financial crisis and the European debt crisis, the E-business websites have experienced tremendous growth in quantity, various websites emerge in endlessly, and internet has built up a direct communication with more and more people through websites. The concept of E-business has been associated with providing information, expressing brand awareness and telling the corporate story in the virtual marketplace (Ruyter et al. 2001). According to Ma (2010), more and more customers prefer to make internet transaction by obtaining quick and convenient information from E-business websites (Ma 2010). Alibaba’s Taobao and Tmall are the outstanding ones of those E-business websites, whose retail remains the sharp growth and becoming highlights of economic growth. Nowadays, Taobao is the first popular E-business website, which also reflects the network shopping phenomenon in the very great degree (Cao 2011; Cai and Li 2012). Wang (2012) pointed out that the success of Taobao should contribute to Alipay transactions, strong shopping atmosphere of the website and higher level service (Wang 2012).

2.2 Tao-Brand Emerge in an Endless Stream

“Tao-brand” refers to the brand original established in Tmall of Alibaba, but not the traditional off-line market. The rise of “Tao-brand, provide new opportunities for the development of Chinese traditional industry. With the Internet-based dissemination form, creating a brand is much faster than before. Because E-business reduce intermediate links and improve efficiency, brand communication and shaping also much faster than the traditional company (Fu and Guo 2012). The rise of Tao-brand attracted the attentions of all level, including those venture capitals. Take the ‘Tao-brand’ Maibaobao as the example. Ye the CEO of Maibaobao (2010) disclosed that, the sale of year 2010 was 8–10 times the same period of 2009, and the company has won the first round of financing scale was 30 millions, this round of investment by the joint investment of DCM and Lenovo investment, which was a Large scale of risk investment acquired by Taobao (Sohu 2010).

According to relevant data shows, consumers seems to attract by those big famous brand in the 2012 “double eleven ” carnival, in fact most of sales was composed of small and medium-sized brand, as well as the original “Tao-brand”.

According to the date provided by Ebrun network (2012), within the 2012 “double eleven”, Tmall has a total of 217 shops single-day sales exceeded 10 million, a total of five shops’ sales break million each, while the clothing brand Liebo, an original ‘Tao-brand’, was among them. In online shopping categories of clothing, the top three sales of women’s clothing were all from original “Tao-brand”, namely Liebo, Inman, ONLY, and the following Table 1 will shows the detail(Huang 2012).

Table 1 Tmall 2012 “double eleven” sales rankings
Full size table

Original ‘Tao-brand’ uses the unique Alibaba platform, employs the completely different channels and marketing end, thus stimulate the Chinese brand pattern change directly.

2.3 Small and Medium-Size Off-Line Brands Rises Suddenly

Reflect on the Taobao and Tmall “Double Eleven” phenomenon of 2012, small and medium-size off-line brands play the most important role, while few of the first line brands take part in. As women dress is the one of the main category, the author take women dress as an example as blow (Yin 2012): The majority of a single product pricing is not more than 1,000 Yuan, such as Qiushuiyiren which is a medium-size brand in the off-line women dress market, and usually the price of a single product is below 400 Yuan. However, its single day turnover nearly reached 8 million Yuan in “Double Eleven” of 2012, which might need more than 10 years’ accumulation even for those big first-line brand in the off-line market. Moreover, the skin care brand Yunifang who obtained remarkable single day turnover is also a medium-size brand in the off-line traditional market.

“Double Eleven” of 2012 made a number of small and medium-size brands as well as “Tao-brands” break out in a short time, which provided the opportunity for them to approach the level of fist line brands.

3 Reasons Analysis

3.1 Risks of Shopping Online

Although the shopping online win more and more support among the people with the time going, the risks of shopping online still exists objectively, such as the risk of wrong version of goods, risk of payment security, risk of credit, risk of business logistics, which are not existing on the traditional off-line market. On the reason of price, many consumers will become more cautious and sensitive in the process of purchasing the expensive goods of first-line brand. When they making a purchasing decision will be more willing to the entity shop and get the face-to-face service of clerk which might seems to be more reliable. In the contrast, those small and medium size brand as well as ‘Tao-brand’ are much cheap than those big first-line brand, in addition to the consumer awareness of those small and medium-size brands original from traditional off-line market, they win out in the ‘Double Eleven’ of 2012.

3.2 Innovation Sales Mode

Similar to the traditional retail industry, those promotion skills such as discount, coupons, and lottery are all adopt by these sellers from network. However, they also invited an innovational sales mode as pre-sale, which might be impossible for those off-line sellers. Take the No. 1 furniture brand of Tmall as an example: it make out the sample firstly, and then take the detail drawings and the renderings, coupled with illustrated introduction of the production process, consumers can pay part of the deposit or full payment, within the prescribed time, the seller will packed and deliver the goods to the customer in accordance with the payment order. This kind of sales model is also a good solution to get rid of surplus goods as well as the pressure of capital.

3.3 Low Cost Interactive Between Businesses and Customer

China is a big manufacturing country, but not the powerful on the issue of brand. In the past, brand owner could only spend money on advertising on the promotion which could not interact with consumers. Now with the help of the E-business platform such as Alibaba, as well as other network marketing skill such as blog marketing, the brand can not only quickly take part in the new products’ market launch and popularize its new products, but also can save a lot of the necessary advertising investment, and such investment usually is necessary and huge. Through such a platform for the relatively weak small and medium-sized brands as well as Tao-brands, not only has the characteristics of less investment, the promotion effect also can be seen in a short time. Otherwise, the buyers’ comments and messages would make a good interaction between consumers. Consequently, it also greatly attracted to these relatively weak small and medium-sized brands as well as some new brands and settle down in relatively stable and mature platform Alibaba.

3.4 The Amplification Effect of Network

The founding general manager of Tmall, Dangdang pre-CEO Huang (2012) pointed out that ‘the Chinese market is too large and dispersed, in the traditional off-line market brand distribution is extremely uneven, even the big first-line brands can only focus on a the big city, but if the brand owner just open a shop in Taobao or Tmall can cover comprehensive national market (Cheng 2010). For small and medium-sized brands spread channel in the off-line market required huge inputs. The market in E-business is a virtual space which breaks through the limits of time and space, and could provide 24 h online transactions and services. Enterprises through the network directly face of all consumers and competitors, thus expand the business scope of target market, so that brings more opportunities (Zhou 2012). In the network, with the popularity of the Interne, the influence of a brand can be magnified and far-reaching dissemination.

3.5 Alibaba Platform Is Mature and Stable

The Alibaba’s Taobao and Tmall as an E-business brand have been operated for many years in China and already win many supports among the people. Taobao and Tmall with B2C, C2C model has strong inclusive, entry barriers for the businesses are relatively few. It already formed its own characteristics and relatively mature and stable platform, which attracted a number of small and medium-sized brands settled down in this platform. On the other hand, the promotion of ‘Double Eleven’ was first held in the year 2009. Until 2012, it is already the third year, diversification of its annual publicity and marketing means is increasing every year. As all mentioned above were the foundation of the gorgeous 19.1 billion’s turnover of 2012 ‘Double Eleven’.

3.6 A Combination of Diversification and Specialization

Based on the rise of network, in 2004 Chris Anderson put forward the long tail theory. The core idea of long tail theory is concerned in the market that not gains great attention in the past. These market although scattered, small, but a large number of small market also occupy a considerable market share (Chen and Huo 2013). Taobao and Tmall of Alibaba is such platform for these small and medium-sized brands make full use of long tail theory. Compared with the traditional retail model, E-business shopping platform is fully embodies the combination of diversification and specialization, from those special food over the country to all kinds of exclusive Shops with high degree of subdivision, from the contraption of creative businesses to overseas purchasing products, relying on the Internet and logistics, regional and spatial restrictions on people’s consumption almost all gone, but the sellers can easily make their goods to approach by more people, so as to maintain its own characteristics(Li 2012). In the “double eleven” of 2012, the excellent performance and the flexible characteristic of small and medium-sized brands evidenced the huge energy existing in these small powers.

4 The Main Problems

4.1 Credit Issue

Credit issue has been the highlight in the E-business market. Unlike the traditional bricks-and-mortar marketplace, the online environment includes several distinct factors that influence brand trust, and consumers become savvier about the Internet brand (Hong-Youl Ha 2004; Rowley 2004) take Taobao as an example, consumers can only get the information of goods by pictures or description provided by the shopkeeper, this also led to some sellers speak in superlatives on the description of goods, even more someone use the images or description of other goods in high quality. Thus, the risk of getting goods in wrong version is formed in the online shopping. According to the Report of Chinese Online buying Research in 2011 (DCCI 2011), 51.5 % of the users think the consumers’ profits can’t be promised; 43.1 % thinks there are problems with the products’ qualities and 34.7 % thinks the sellers’ credit degree is not high (DCCI 2011).

4.2 Problem of Logistics System

Logistics is a major weakness on the development of online retail industry in china. Although in recent years, China’s express industry is developing rapidly, the development between different areas or brands is uneven, and very few of businesses in E-commerce get their own logistics distribution system. In a long time, business flow and logistics division, Its basically behave in: the online business, does not have a valid social logistics distribution system to provide low-cost transfer, timely, adequate transfer service, distribution cost, speed is both the biggest heartache, seriously affect the business and the scale benefit (Liu 2011). A serious explosion phenomenon that existing in Shentong, Yuantong, Yunda and many other express companies in 2012 “Double Eleven”, was fully reflect the problem. In addition, the cost of delivery and waiting cost ultimately borne by consumers, and when they make the purchase decision, will undoubtedly bring logistics costs are taken into account. Therefore, the logistics cost become important influence factors of C2C seller sales (Guo 2011).

4.3 Price Competing

Half off discount is the biggest selling points “Double eleven” promotions of Taobao and Tmall, which is typical of price war. Price war is a “double-edged sword”, not only can it can also hurt yourself. Comparison of international famous brand with its own characteristic of the goods, quality and service to win, the price war is a kind of low level competition means.

Within 2012 “Double eleven” promotions of Taobao and Tmall, some businessmen were revealed as false discount, to raise the price in advance, and then discount. The enthusiasm of consumer in repeat purchase will also been hit to some extent.

4.4 Consumer Distribution Uneven

According to the public information, The TOP10 provinces and area of 2010 Taobao annual turnover are Guangdong Province, Zhejiang Province, Shanghai City, Jiangsu Province, Beijing City, Shandong Province, Fujian Province, Sichuan Province, Liaoning province and Hubei Province. The eastern coastal areas still take the lead, while the purchasing power of the central and western regions rise is rapid, but compared with the developed coastal area the gap is still significant.

In 2012 “double 11” promotion of Taobao and Tmall, until 10 am, Zhejiang province’s turnover is the top one, followed by Jiangsu province, Shanghai, Beijing, Guangdong province, Sichuan province, Shandong province, Hunan province, Hubei and Fujian province. Illustrated from those data, the center-west region is still in the weak place, and regional gap is obvious. The purchasing power of western region is still needed to explore especially.

5 Ending

Reflects on the rise of small and medium size brands and “Tao-brands” in the 2012 “Double Eleven” phenomenon of Taobao and Tmall, it can make a conclusion that E-business provides very good opportunities for the development of small and medium size brand as well as “Tao-brands”. However, many problems are also highlighted. With the dramatic growing of E-business, there are experts and scholars pointed out the threat of E-business to the traditional economy, on the other hands, enterprise were planning to completely abandon the traditional business but develop Tao-brand only. The author considers that E-business is not stifle the traditional economy, but is leading by traditional business. The traditional off-line brands provide the main impetus for the success of Taobao and Tmall’s ‘double eleven’ promotion, many of the brand-building rely on the traditional off-line business model. E-business is also the pusher for the development of traditional economy in a sense. So that, the author believe that E-business advance in unison with traditional business is the only path to the final successes of small and medium-size brand.