Are the subdued results an indication that the Chinese consumer is changing? Consumer demand was more muted than in previous years, with analysts attributing the results to a lack of spending power and dampened desire to spend because of the hardline zero-COVID policy.
As the Chinese market matures amid economic uncertainty, the exponential phase of China’s e-commerce market growth seems to have ended. Now the focus for brands and retailers has shifted away from heavy discounting to optimizing consumer experience and retention.
Jing Daily reported that Dai Shan, President of Alibaba’s Core Domestic E-Commerce, pointed out that the future of Double 11 is no longer that of a machine producing ever-higher GMVs, but rather an important platform for a better consumer experience and business growth.
Its rival JD.com did not publish GMV or sales growth rate either. Alibaba did not hold its usual celebrity-studded gala show this year nor any in-person media events, citing the COVID-19 pandemic.
The e-commerce platform’s growth merchandising value (GMV) was widely predicted to post flat to low single-digit growth, underscoring weak Chinese consumer sentiment hit by stringent COVID-19 curbs and a sharply slowing economy.
In a press release, Alibaba said the event had “delivered results in line with last year’s GMV performance despite macro challenges and COVID-related impact.” GMV growth has been slowing in recent editions of Singles Day—the world’s biggest online shopping festival that has, despite its name, evolved into a multiweek event and is a key barometer of Chinese retail demand.
According to Reuters Consultancy Syntun, “Alibaba and other Chinese e-commerce firms holding Singles Day shopping events together logged a 4.7% decline in sales for the first 12 hours of the final day.” Last year’s 8.5% GMV rise for Alibaba’s platforms was its lowest-ever growth rate, following a 26% jump in 2020. Before 2020, the festival was a one-day event.
Citi analysts said this week they were conservatively forecasting Alibaba’s GMV for the event to range from 545 billion yuan to 560 billion yuan ($75 billion to $77 billion), with growth of 0.9% to 3.6%.
- Alibaba said in a statement gross merchandise value was “in line with last year’s GMV performance despite macro challenges and COLVID-related impact.” Sales last year reached 540.3 billion yuan ($76.1 billion).
- Alibaba’s Tmall marketplace offered Singles Day deals on more than 17 million products—3 million more than last year—with a record-matching 290,000 brands participating.
- Alibaba noted sales of high-tech beauty devices such as gadgets to cool and lift facial skin had surged some 5,570% from last year.
- Swiss beauty brand La Prairie’s GMV during the first four hours of the first sales window surpassed that of the entire 11.11 sales period last year. GMV refers to the total value of orders paid using Alipay on marketplaces Taobao and Tmall.
- JD.com provided nearly 20 million new items this Singles Day, with the total transaction volume increasing 1.57 times compared with the same period in October, of which half achieved a month-on-month growth rate of over 200%.
- JD reported that during the first 10 minutes of this period, turnover for 87 international beauty brands, including Estée Lauder, L’Oréal, and L’Occitane tripled from last year in the first 10 minutes of sales.
“In recent years, livestreaming seems to have created a quick way for brands to get famous and sales boomed,” Dave Xie, a Shanghai-based principal of consultancy Oliver Wyman, told Bloomberg. “Amid the recent falls of the superstar livestreamers, brands are now actively speeding up the development of their own livestreaming studios” in order to cut ties with the top influencers, while retailers are also shifting to smaller platforms, he said.
“Weak buying sentiment among mainland Chinese shoppers and logistical disruptions will persist amid ongoing mobility curbs under China’s Covid-Zero policy,” wrote Bloomberg Intelligence analysts Catherine Lim and Trini Tan.
“Overall platform diversification is a trend, driven by consumer behavior and brand strategy,” Sherri He, Managing Director of Kearney Greater China told Bloomberg. More and more brands have opened stores on JD.com and other platforms in the last year, she said.
Apart from rising rivalries, this year’s Singles Day was weighed down by China’s slow economic expansion. Gross domestic product in the third quarter rose 3.9%, while retail sales growth slowed to 2.5% in September from August’s 5.4% increase, according to data from the Chinese government.
“Singles’ Day has been totally diluted in terms of the impact,” William Yuen, Investment Director at Invesco Hong Kong Ltd. told Bloomberg. “No one had much expectation about whether they would beat or not. I think it becomes more like a formality or a numbers game.”