Singles’ Day has drawn a lukewarm response from Chinese shoppers this year, the latest indication that consumers and retailers in the world’s biggest market remain spooked by Xi Jinping’s zero-Covid policy and crackdown on excess.
Jack Ma’s Alibaba Group has spent years making November 11 the biggest retail event on the planet, enlisting the services of celebrities including American hip-hop producer Pharrell Williams and Australian actress Nicole Kidman to stoke the hype.
However, this year Alibaba did not disclose full sales results for the first time in the shopping festival’s history, but said on Saturday the result was “in line” with 2021’s performance, implying the end of years of rapid growth.
Jacob Cooke, managing director of Beijing-based WPIC Marketing + Technologies, said the result showed that Alibaba had “clearly abandoned” the celebration of excessive consumption.
“Part of that is economic headwinds, but also the consumer market that has matured and the days of 30% growth … are far behind us,” Cooke said, adding that “common prosperity and anti-monopoly pushes are also factors.”
According to Bain, consultancy Singles Day from 2014 to 2020 saw annual growth of between 25% and 50%. Last year, growth slowed to 13%.
Singles’ Day, originally conceived as a celebration of celibacy among Chinese students and digitally written as 11.11, has been a boon for global luxury brands and is a bellwether for the world’s largest consumer market.
However, this year’s event came at a dark time for the Chinese economy.
Xi won an unprecedented third five-year term last month, raising fears of an erosion of market-oriented reforms that have underpinned decades of growth in China. Since late 2020, the Chinese president’s “common prosperity” campaign has sought to bring billionaires, including Ma, to heel, rein in private sector monopolies, and eradicate the culture of excess and vice among Chinese youth. .
China’s 1.4 billion people are also under strict coronavirus controls, with the Xi administration prioritizing eradicating Covid-19 outbreaks over economic growth. While Beijing eased some quarantine and contact tracing rules on Friday, fears of citywide lockdowns persist as cases hit their highest level in months.
He Dan, 31, who works in the hotel industry in Changsha, central China, estimated that his income and expenses had fallen by almost a third since the start of the pandemic.
“I definitely spend less. . . I can’t travel so I’ve lost consulting jobs,” she said. “My feelings for the future? I want to curse. These stupid Covid policies.
Shi Wei, 32, an administrative professional in a multinational group in Beijing, is trying to save more and avoid spending due to “uncertainties” related to the pandemic.
“If you’re locked up at home and can’t go to work for a few months, nobody knows what will happen to your job,” she said.
Still, WPIC’s Cooke said the trade event remains the biggest day of the year for many global brands, considering more than RMb1tn ($140 billion) in spend. Slower growth levels were a sign of market maturation.
While Alibaba is under pressure, Cooke also noted the success of Douyin, TikTok’s sister app which has 700 million daily users, and noted strong demand in the categories health and wellness, pets , outdoors and sports, “reflecting the changes in lifestyles taking place in China”. .
Chui Xue, head of operations at Alibaba, said the result showed “the emergence of new consumer trends with huge untapped potential”.
“We have witnessed the resilience and dynamism of the consumer sector in China,” he added.
HSBC analysts noted that while the consumption picture varied widely from city to city in China – largely depending on the intensity of Covid-19 restrictions – consumer confidence levels at the nationwide had fallen to near-record lows. Retail sales growth has been “well below” pre-pandemic levels in recent months.
Nomura’s chief economist for China, Ting Lu, warned that the road to reopening could be “slow, painful and bumpy”.
“The number of Covid cases could rise further after the recent surge, so de facto lockdowns may be more difficult than de jure lockdowns, as local authorities still believe their performance is determined by avoiding mass infections,” did he declare.
Even in 2023, “the release of pent-up demand could be moderate and settle below pre-Covid levels.”
Additional reporting by Qianer Liu and Eleanor Olcott in Hong Kong