HONG KONG — This year’s Singles’ Day shopping festival, traditionally known for its extraordinary discounts and consumer frenzy, has lost some of its luster as merchants and shoppers explore new avenues for growth amid challenging economic conditions.
Initiated by the e-commerce giant Alibaba, the annual event, which aligns with the date Nov. 11, has evolved to include significant participation from other platforms such as JD.com and Pinduoduo, both domestically and internationally.
Once a single-day retail extravaganza, the Singles’ Day festival has expanded, with promotional activities beginning weeks in advance to build anticipation and drive sales. It has historically served as an indicator of consumer sentiment in China.
However, the current landscape presents a different story. China’s economy is struggling due to ongoing issues in the real estate sector and deflation, leading consumers to be more selective in their spending.
A fitness center owner in Beijing, Wang Haihua, shared her experience of the festival, stating, “I only spent a few hundred yuan on daily necessities.” She noted that the discounts offered during Singles’ Day are not as appealing as they once were.
“Over the years, we have seen through various promotions which seem like tricks,” Wang added. Similarly, Zhang Jiewei, a barber from Xi’an, remarked that he has lost faith in the festival’s promotions. He explained that some businesses inflate their prices to create the illusion of a discount, saying, “I used to buy a lot two or three years ago, but I stopped during the pandemic due to reduced income. This year, I won’t be purchasing anything.”
Experts indicate that recent government stimulus measures have not significantly restored consumer confidence. Shaun Rein, director of the China Market Research Group in Shanghai, mentioned, “People are not interested in spending and are cutting back on big-ticket items.” He noted that the weak economy has made discounts commonplace throughout the year, diminishing the special appeal of Singles’ Day since October 2022.
Rein anticipates low growth for this year’s festival as consumer spending continues to tighten amid economic uncertainties. However, some sectors, like sportswear and fitness, appear to be resilient as shoppers opt for more affordable alternatives.
Platforms such as JD.com and Alibaba, which previously disclosed total transaction values during Singles’ Day, have ceased to do so, reflecting changes in marketplace dynamics. Historically, growth rates during the festival were in double digits, but recent estimates have dropped to low single-digit growth. Data provider Syntun reported that gross merchandise volume across major platforms grew only 2% last year to approximately 1.14 trillion yuan (around $156.40 billion), markedly lower than pre-pandemic figures.
Merchants who usually engage in Singles’ Day promotions are now questioning the return on investment concerning participation costs, particularly regarding advertising and unsatisfactory sales outcomes. Zhao Gao, a garment factory owner, expressed concern, stating that high advertising fees resulted in only breaking even after accounting for sales.
“The platforms have numerous promotional rules, and customers have grown more skeptical,” Zhao explained, indicating that he has decided to refrain from participating in Singles’ Day promotions.
Du Baonian, who runs a mutton processing business in Inner Mongolia, reported a significant drop in sales over the past year, citing a decline of 15%. Despite continuing with Singles’ Day promotions, he acknowledged that increased expenses usually result in minimal returns, although he views advertising as a necessary strategy for maintaining market presence.
As the domestic e-commerce market faces slower growth, platforms are increasingly looking abroad to find new opportunities. Initiatives such as global free shipping are being offered to facilitate international sales. For instance, Alibaba shared via a blog post that approximately 70,000 merchants experienced doubled sales through global free shipping initiatives, with new customers from regions like Singapore and Hong Kong also seeing significant growth.