The Singles’ Day shopping festival is losing its luster under China’s slowing economy

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HONG KONG (AP) – Retailers and consumers alike found the Singles’ Day shopping festival on Monday less glamorous than in years past as e-commerce firms looked overseas for growth.

An annual event named after its date number of Nov. 11 was started by the e-commerce platform Alibaba, which offered attractive discounts to entice consumers to spend more. The extravaganza has since expanded to other platforms such as JD.com and Pinduoduo in China and other countries.

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Although Singles’ Day was previously a one-day event, shopping platforms in China are now starting the festival in the coming weeks to increase sales volume. The festival has also traditionally been considered as a measure of consumer sentiment.

But amid China’s sluggish domestic economy, dragged down by the housing crisis and inflationary pressures, consumers are no longer going all out on shopping sprees.

“I spent a few hundred yuan on daily necessities,” said Wang Haihua, who owns a gym in Beijing.

Wang said that the prices offered on e-commerce platforms during Singles Day are not cheaper than usual.

“They’re all tricksters and we’ve seen it over the years,” he said.

Zhang Jiewei, a 34-year-old barber shop owner in Xi’an city, echoed Wang’s words, saying that he no longer trusts Singles’ Day promotions as a retailer often raises the regular price of a product before offering a discount. , giving buyers the illusion that they are getting a deal.

“I used to buy a lot two or three years ago and I even bought a mobile phone (on Singles Day),” she said.

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“I stopped doing that following the pandemic because of the income. I will not buy anything this year,” added Zhang.

Some experts say Beijing’s recent stimulus measures have done little to boost consumer confidence.

“People are not interested in spending money and are cutting back on big-ticket purchases,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “From October 2022, the weak economy means that everything has been discounted all year, 11.11 will not bring more discounts than last month.”

Rein said he expects lower growth for the Singles’ Day shopping festival as shoppers tighten their spending in anticipation of tough economic times ahead.

Categories like sports and fitness, however, have been doing well as customers “trade in a Gucci bag for a Lululemon sports bag,” he said.

Platforms such as JD.com and Alibaba, which use e-commerce platforms Taobao and Tmall, were previously used to publish the number of transactions made during the festival, but have stopped revealing the total amount. While annual growth used to be in the double digits, the latest figures have dropped to low single digit growth.

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Syntun, a data provider, estimated that last year’s total sales volume across all major e-commerce platforms grew 2% to 1.14 trillion yuan ($156.40 billion), a far cry from the double-digit growth before COVID-19. .

Retailers who often take part in Singles’ Day shopping festivals say the cost of participating no longer pays off, between high advertising costs and poor sales.

Zhao Gao, the owner of a garment factory in the eastern province of Zhejiang, said that after paying the advertising costs on e-commerce platforms, he would break even after sales.

“Platforms have a lot of promotion rules and customers are still skeptical,” he said. “As a retailer, I no longer participate in Singles Day promotions.”

Another trader, Du Baonian, who runs a mutton processing company in Inner Mongolia, said overall sales last year fell 15% as consumers cut back on quality and consumption.

Du said that although he still participates in Singles Day promotions, the higher costs are often not recouped due to sluggish sales.

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“We are seeing a decrease in revenue, but advertising on the platform can help us maintain our leading sales position,” he added, adding that he is considering advertising on more e-commerce platforms to target more consumers.

Meanwhile, e-commerce platforms grappling with a slow domestic market have turned to overseas markets in search of new growth, offering promotions such as free worldwide shipping and allowing sellers to sell globally with ease.

Alibaba, for example, said in a blog post on its Alizila site that some 70,000 merchants saw double sales and free shipping worldwide. In markets such as Singapore and Hong Kong, new customers also doubled, Alibaba said.

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Associated Press researcher Yu Bing in Beijing contributed to this report.

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