Singles Day has elicited a lukewarm response from Chinese shoppers this year, the latest sign that consumers and retailers in the world’s largest market are nervous about Xi Jinping’s zero-Covid policy and his crackdown on excesses.
Jack Ma’s Alibaba Group spent years building the largest retail event on the planet on November 11, enlisting the services of celebrities including American hip hop producer Pharrell Williams and Australian actress Nicole Kidman to promote the event.
Although this year Alibaba did not disclose full sales results for the first time in the shopping festival’s history, but said on Saturday that the results were in line with the performance of 2021, which means the end of years of rapid growth.
Jacob Cook, chief executive of Beijing-based WPIC Marketing + Technologies, said the results showed Alibaba had “distinctly shifted” from celebrating excessive consumption.
“Part of it is economic headwinds, but the consumer market has also matured and there are days of 30 per cent growth. , , We are far behind us,” Cook said, adding that “general prosperity and an anti-monopoly push are also factors”.
According to Bain, consultancy, Singles Day achieved year-on-year growth of 25 percent to 50 percent from 2014 to 2020. Last year the growth rate had come down to 13 per cent.
Singles Day, originally regarded as a celebration of being single among Chinese students and written numerically as 11.11, has been a boon to global luxury brands and is one of the largest consumer markets in the world. There is a bell for
However, this year’s incident came at a disappointing turning point for China’s economy.
Xi secured an unprecedented third five-year term in power last month, raising fears of the erosion of market-oriented reforms that underpin decades of development in China. Since the end of 2020, the Chinese president’s “general prosperity” campaign has sought to bring billionaires including Ma to heels, rein in private sector monopolies, and eradicate the culture of excesses and evil from China’s youth.
China’s 1.4 billion people are also under strict coronavirus control as the Xi administration prioritizes eradicating the COVID-19 outbreak over economic growth. While Beijing eased some quarantine and contact tracing rules on Friday, fears of a citywide lockdown remain as cases rise to their highest level in months.
He Dan, 31, who works in hospitality in Changsha, central China, estimated that his income and outlay have dropped by about a third since the start of the pandemic.
“I’m definitely spending less. . . I can’t travel so I lost my consulting job,” she said. “My feelings for the future? I want to curse Those stupid covid policies. ,
Xi Wei, 32, an administration professional at a multinational conglomerate in Beijing, is trying to save more and avoid spending due to “uncertainties” related to the pandemic.
“If you’re locked at home and can’t go to work for a few months, no one knows what will happen to your job,” she said.
Still, WPIC’s Cook said the shopping event remained the most important day of the year for many global brands with more than RMb1tn ($140bn) spent. Slow growth levels were a sign of market maturity.
While Alibaba is under pressure, Cook also noted the success of TikTok’s sister app Douyin, which has 700 million daily users, and noted the high demand in the health and wellness, pet, outdoor and sports categories, “Lifestyle in China”. reflects a change in .
Chui Xue, an operations executive at Alibaba, said the results reflect “the emergence of new consumption trends with huge untapped potential.”
“We have seen resilience and vibrancy in China’s consumption sector,” he said.
Analysts at HSBC noted that while the consumption picture varied widely across China’s cities – largely depending on the intensity of COVID-19 restrictions – nationwide consumer confidence levels had plummeted to near-record levels. Retail sales growth was “far below” pre-pandemic levels in recent months.
Nomura’s chief China economist Ting Lu warned that the road to reopening could be “slow, painful and bumpy”.
He said, “The number of Covid cases may increase further after the recent surge, so the actual lockdown may be harder than the legal lockdown, as local authorities still believe their exposure to large-scale infections.” is determined by avoidance,” he said.
“Pent-up demand release may moderate and fall below pre-Covid levels” in 2023 as well.
Additional reporting by Kianner Liu and Eleanor Olcott in Hong Kong