Women walk out of a fashion boutique near a display promoting China’s popular e-commerce sales, the “Single Day” global online shopping festival, at a shopping center in Beijing, Monday, Nov. 4, 2024. | Photo Credit: AP
Merchants and consumers alike found Monday’s Singles Day shopping festival less glamorous than in years past as e-commerce companies looked abroad for growth.
The numerically named annual event on November 11 was initiated by the e-commerce platform Alibaba, which offers attractive discounts to entice shoppers to spend big. Extravaganza has since expanded to other platforms like JD.com and Pinduoduo in China as well as overseas.
While Singles Day was previously a one-day event, shopping platforms in China are now starting a festival next week to increase sales volume. The festival is also considered a barometer of consumer sentiment.
But amid China’s lagging domestic economy, dragged down by the real estate crisis and deflationary pressures, consumers no longer go all out on purchases during the shopping extravaganza.
“I only spend a few hundred yuan for my daily needs,” said Wang Haihua, who owns a fitness center in Beijing.
‘The price is not lower, all the tricks’
Wang said that the prices offered on e-commerce platforms during Singles Day are not necessarily lower than usual.
“They’re all tricks and we’ve seen them over the years,” she said.
Zhang Jiewei, a 34-year-old who runs a barber shop in Xi’an city, echoed Wang’s sentiments, saying he no longer believes in Singles Day promotions because some merchants tend to raise the regular price of products before offering discounts. , giving consumers the illusion of getting a deal.
“I used to buy a lot two or three years ago and I even bought a mobile phone (during Singles Day),” he said.
“I stopped doing this after the pandemic because of low income. I won’t buy anything this year,” Zhang added.
Some experts say Beijing’s recent stimulus measures have had little effect on boosting consumer confidence.
“People are not interested in spending and cutting big-ticket items,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Since October 2022, the weak economy means that everything has been discounted throughout the year, 11.11 will not bring more discounts than the previous month.” Rein said he expects modest growth for the Singles’ Day shopping festival as consumers tighten their spending in anticipation of tough economic times.
Categories such as sports and fitness, however, have done well as customers “trade down Gucci bags for Lululemon sports,” he said.
Platforms like JD.com and Alibaba, which operate e-commerce platforms Taobao and Tmall, previously used to publish the value of transactions made during the festival, but have since stopped disclosing the total amount. While annual growth used to be in the double digits, recent estimates have reduced to single-digit growth.
Syntun, a data provider, estimated that last year’s gross merchandise volume sales on major e-commerce platforms grew only 2% to 1.14 trillion yuan ($156.40 billion), far from the double-digit growth before COVID-19.
High advertising costs: merchants
Traders who used to participate in the Singles Day shopping festival said participation fees were no longer paid, due to high advertising costs and poor sales.
Zhao Gao, who owns a garment factory in eastern Zhejiang province, said that after paying advertising fees to e-commerce platforms, he would only break even after sales.
“The platform has a lot of rules for promotion and customers are becoming more skeptical,” he said. “As a merchant, I am not involved in promoting Singles Day.”
Another trader, Du Baonian who runs a food company that processes pork in Inner Mongolia, said that overall sales last year had dropped by 15% as consumers cut back and cut back on consumption.
Du said that while he still participates in Singles Day promotions, the higher fees usually don’t pay off because of slow sales.
“We are seeing a shrinking revenue, but advertising on the platform can help us maintain our leading sales position,” he said, adding that he considers advertising on e-commerce platforms more to target other consumers.
Meanwhile, e-commerce platforms grappling with the slow domestic market have also turned to overseas markets to find new growth, offering promotions like global free shipping and allowing merchants to sell globally easily.
Alibaba, for example, said in a blog post on its Alizila site that about 70,000 merchants saw double sales with free global shipping. In markets like Singapore and Hong Kong, new customers also doubled, Alibaba said.
Published – November 11, 2024 12:03 IST
