The 2015 Tmall Double 11 Global Shopping Festival concluded successfully. As of 24:00 on November 11, 2015, the total sales transaction amount reached 912.17 billion yuan, with wireless transactions accounting for 626 billion yuan and a 68.67% share. Analysis of 2015 Double 11 sales data shows that the top five regions for online shopping consumption were Guangdong, Zhejiang, Jiangsu, Shanghai, and Beijing.

The explosion of strong domestic demand

This year's Double 11 broke multiple transaction records right from the start. Within just 12 minutes and 28 seconds, the transaction volume exceeded 10 billion yuan. At 7 hours, 45 minutes, and 42 seconds, the transaction volume surpassed 417 billion yuan, exceeding the total online transaction amount of the 2014 US Thanksgiving shopping season. At 11:50, Tmall's transaction volume exceeded 571 billion yuan, breaking the 2014 Double 11 full-day transaction record. The total sales transaction amount of the Tmall Double 11 Global Shopping Festival was 912.17 billion yuan, with wireless transactions accounting for 626 billion yuan and a 68.67% share.

Jack Ma, chairman of the Alibaba board of directors, stated that Double 11 is not only a feast for e-commerce but also a carnival for the real economy and real enterprises. Double 11 does not represent the entire Chinese economy; it only shows a small part of China's strong domestic demand. Alibaba hopes to hold Double 11 for 100 years, longer than Alibaba's lifespan. We aim to make Double 11 last for 100 years, with 93 years still to go; this is just the beginning.

The decline of online brands and the rise of traditional brands

Data from Data Cube shows the ranking of home furnishing and building materials brands, including Jiu Mu, Ou Pu, Ao Pu, Jian Pai, Lei Shi, TOTO, Kohler, Panasonic, Philips, Moen, Ao Duo, Ka Bei, Cai Dao, Bell, Dong Peng, and Fa En Sha. Among them, there are five lighting brands: Ou Pu, Lei Shi, Panasonic, Philips, and Ao Duo, indicating the significant presence of lighting products on Tmall and Taobao.

In the lighting category, the top ten brands are Ou Pu, Lei Shi, Philips, Ao Duo, Panasonic, Yue Ying Kaidun, Shi Yuan, Ouselos, POK Pin Yi, and Designer's Lamp. Among them, four are traditional brands, and six are online brands.

In the light source category, the top ten brands are Ou Pu, Philips, Lei Shi, Sanxiong Jiguang, Midea, Aideron, Canmeijia, Foshan Lighting, LED, and Delixi. Among them, seven are traditional brands, and three are online brands.

In terms of sales volume, traditional brands dominate the top five in both the lighting and light source categories, especially in the light source category, where they occupy all top five spots. It's clear that traditional brands, leveraging their strong offline resources and brand appeal, are thriving in the e-commerce field. Taking Ou Pu Lighting as an example, since participating in Double 11 in 2011, its sales have increased from 3 million to 16 million in 2012, 60 million in 2013, 94 million in 2014, and 120 million in 2015, demonstrating a significant upward trend.

The pressure of costs and the fading glory of pure e-commerce brands

It's clear that online brands are no longer as dominant in sales rankings. In the past, online brands were actively sought after by Tmall due to their low customer acquisition costs and favorable policies, leading to the rise of many online brands such as Ao Duo, Hanyuan, and Ouselos, which once occupied top positions in sales rankings. However, with the growth of Tmall and Taobao, the entry of traditional brands, and the emergence of new brands, the operating costs of online brands have increased significantly, even exceeding offline operating costs.

Taking Tmall as an example, the sales cost of lighting products in e-commerce has reached 35%, including: logistics (2%), packaging (2%), after-sales (1%), promotion (10%), salaries and management fees (10%), Tmall commission (5.5%), and taxes (5%). The sales cost of lighting products in e-commerce is even higher, reaching 40%, including: logistics (7%), packaging (2%), after-sales (1%), promotion (10%), salaries and management fees (10%), Tmall commission (5.5%), and taxes (5%). On the JD platform, the SOP commission is 8%, and the sales costs for lighting products are 37.5% and 42.5%, respectively. The final profit margin is approximately 5%-10%, indicating a challenging survival situation for online brands.

During Double 11 in the lighting industry, major brands such as Philips, Osram, Leishi, and Ou Pu participated, along with Taobao brands such as Zhouming Hanyuan, Ao Duo, and POK Pin Yi. Participating companies can be categorized into three types: pure e-commerce brands without factories; brands with both traditional channels and e-commerce; and brands that own factories but only operate online. The rankings show that with increasing operating costs, online brands, lacking channel resources and supply chain support, are finding it increasingly difficult to rely solely on online marketing.

Industry brands launch a wave of "electrification"

Currently, industry brands are establishing e-commerce channels, ranging from small teams to large-scale business units. E-commerce has become an indispensable channel. In terms of traditional brands, Ou Pu Lighting, focusing on home lighting products, achieved a "three-peat" on Tmall. Leishi, in addition to entering Tmall, leveraged O2O to integrate channel resources. Other brands such as Sanxiong Jiguang, Sunlight Lighting, Hongyan Electric, and Zhengtai have opened their own flagship stores on Tmall and JD. Among new brands, Zhouming Technology, after acquiring a stake in Hanyuan in August 2013, established a subsidiary to promote and operate the O2O model in the LED lighting industry. Other brands such as Qin Shang Optoelectronics and Tongfang Lighting have also opened online flagship stores on Tmall and JD, achieving remarkable results.

Industry insiders indicate that Taobao sellers have undergone four stages of transformation since starting as a general merchandise market: the first stage involved supporting large sellers to achieve rapid growth; the second stage saw the emergence of brand awareness, with Taobao brands becoming benchmarks; the third stage focused on deepening brand strategy, with Tmall's independence and traditional brands expanding their presence. From 2012 onwards, Taobao sellers entered the fourth stage. With the popularity of the O2O concept and Tmall's support for offline traditional brands, traditional brands such as Philips, Ou Pu, Panasonic, and Leishi have risen strongly in the e-commerce field. Competition shifted from focusing on algorithms and user behavior to brand-to-brand competition. In this context, some early Taobao brands experienced significant market share erosion, leading to industry-wide brand-to-brand competition.

Online "swordplay", aiming for offline success

With e-commerce becoming a major trend, manufacturers have gradually shifted from rejection to acceptance, with online and offline channels merging. In addition to major brand manufacturers, offline dealers are also participating.

Pan Zhihui, from the e-commerce department of NVC Lighting, stated that in this campaign, NVC distributors played a significant role, contributing over 60% of the turnover. On Taobao, NVC has over 60 flagship stores, with more than 5 exceeding one million in turnover. In contrast, NVC's online flagship store only accounts for about 30% of total sales. This "brand group buying" approach prevents online-offline competition for market share, maximizing the interests of distributors.

Additionally, Ding Long, CEO of Opple Lighting China, previously stated publicly regarding e-commerce that Opple's most profitable channel is offline. Opple's total revenue in 2014 was 4 billion yuan, with e-commerce accounting for only a small portion. E-commerce essentially serves as advertising. One function of the O2O model is to transform online-offline price conflicts into mutually beneficial partnerships, requiring joint investment from manufacturers to achieve a win-win situation.

Following the Double Eleven data frenzy, companies should reflect on their own positioning. Some online brands perform well, while some traditional brands underperform. Slower progress isn't necessarily negative; what matters more is a company's ability to remain grounded amidst the hype, continuously innovate, and create greater social value.