Singles’ Day has received a lukewarm response from Chinese shoppers this year, the latest indication that consumers and retailers in the world’s largest market fear Xi Jinping’s zero Covid policy and pressure on extremism.
Jack Ma’s Alibaba group has spent years making November 11 the biggest retail event on the planet, recruiting celebrities including American hip hop producer Pharrell Williams and Australian actress Nicole Kidman. arouse excitement.
This year, however, Alibaba did not reveal full sales results for the first time in the history of the shopping festival, but hinted on Saturday that the result was “in line” with 2021 performance and that years of rapid growth were over.
Jacob Cooke, CEO of Beijing-based WPIC Marketing + Technologies, said the result shows that Alibaba has “clearly changed” from celebrating overconsumption.
“Part of that is the economic headwinds, but also the consumer market has matured and the days of 30 percent growth . . . are far behind us,” Cooke said, adding that “common prosperity and anti-monopoly pressures are also factors.”
According to Bain, the consulting firm saw Singles’ Day growth of between 25 percent and 50 percent year over year from 2014 to 2020. Growth fell to 13 percent last year.
Originally conceived as a celebration of being single among Chinese students and numerically written as 11.11, Singles’ Day has been a boon for global luxury brands and a harbinger for the world’s largest consumer market.
But this year’s event came at a depressing point for the Chinese economy.
Last month, Xi achieved an unprecedented third five-year term in power and erosion of market-oriented reforms That’s what fueled decades of growth in China. Since late 2020, the Chinese president’s “shared prosperity” campaign has sought to rein in billionaires, including Ma, rein in private sector monopolies, and eradicate a culture of extremism and depravity from Chinese youth.
China’s 1.4 billion people are also under strict coronavirus controls, as the Xi administration prioritizes the eradication of COVID-19 outbreaks over economic growth. Beijing relax on Friday some quarantine and contact tracing rulesCitywide curfew fears continue as cases hit their highest level in months.
He Dan, 31, who works in hospitality in central China’s Changsha, estimates that his income and spending have fallen by about a third since the start of the pandemic.
“I’m definitely spending less . . . I can’t travel, so I lost consulting jobs,” he said. “My feelings about the future? I want to curse. Those stupid Covid policies.”
Shi Wei, 32, a management expert at a multinational group in Beijing, is trying to save more and avoid spending amid “uncertainties” about the pandemic.
“No one knows what will happen to your business if you are locked up at home and not able to go to work for several months,” he said.
Still, WPIC’s Cooke said the shopping event remains the most important day of the year for many global brands spending over RM1 trillion ($140 billion). Slower growth levels were a sign of market maturation.
While Alibaba was under pressure, Cooke also noted the success of TikTok’s sister app, Douyin, which has 700 million daily users, noting the high demand in the health and wellness, pet, outdoor and sports categories “reflecting ongoing lifestyle changes in China”. .
Chui Xue, head of operations at Alibaba, said the result showed “new consumption trends are emerging with huge untapped potential”.
“We have witnessed the resilience and vitality of China’s consumer sector,” he added.
HSBC analysts noted that while the consumption picture varies widely in different cities in China – largely due to the intensity of Covid-19 restrictions – nationwide consumer confidence levels have fallen to near-record lows. Retail sales growth has been “well below” pre-pandemic levels in recent months.
Nomura chief Chinese economist Ting Lu warned that the road to reopening could be “slow, painful and bumpy”.
“Covid case numbers may increase further after the recent surge, so actual lockdowns may be more difficult than de jure lockdowns as local officials believe their performance is still determined by avoiding major infections,” he said.
Even in 2023, “the release of pent-up demand may be moderate and settle below pre-Covid levels”.
Additional reporting by Qianer Liu and Eleanor Olcott in Hong Kong
