Employees at an e-commerce company pack and sort express parcels before and after the Double 11 Shopping Festival in Lianyungang, Jiangsu Province, China, November 1, 2024.
Video Visual China Group | Getty Images
BEIJING — Early indicators from China’s biggest shopping event this year revealed gains in some categories, with overall sales expected to grow relatively modestly.
China’s version of Black Friday started on October 14, more than a week earlier than last year, as the e-commerce player. alibaba and JD.com Address lukewarm consumer spending. The shopping festival, also known as “Singles Day” or “11.11,” has evolved into a multi-week promotional period in recent years since Alibaba launched it on November 11, 2008.
“So far, it’s going to be a little bit better than last year in terms of GMV growth,” Jacob Cook, co-founder and CEO of WPIC Marketing + Technologies, told CNBC. Thursday. The company helps foreign brands such as Vitamix and IS Clinical sell online in China and other parts of Asia.
GMV refers to gross merchandise value, an industry metric that measures sales over a period of time. Chinese e-commerce giant has stopped reporting Singles’ Day GMV in 2022 amid the pandemic. Alibaba’s GMV increased by 8% in 2021, while Jingdong’s increased by 28%, totaling more than $139 billion.
According to research firm Xintun, this year’s Singles’ Day gross merchandise value was 845 billion yuan ($119.1 billion) as of October 30. Due to the extended promotional period this year, it is unclear how GMV will compare to 2023.
About 80%, or about $95 billion, came from Alibaba, Jingdong and Jingdong. P.D.D.nearly 20% was generated via live streaming sales platforms Kuaishou and ByteDance’s Douyin, a Syntun report showed.
While Singles’ Day GMV is no longer growing 30%, Cook said the company’s data shows it is expected to grow about 15% this year, up from 11% in 2023 when the festival lasts 19 days. He said that the increase would exceed the growth rate.
“The experiential stuff is starting to do really well. It’s more Lululemon than Louis Vuitton luxury, which is what we’ve been saying for a while,” Cook said. he said. “It’s just that consumer habits have changed significantly.”
Subsidies strengthen home appliances
Contributing to this year’s Singles’ Day sales increase is the trade-in subsidy for home appliances that China launched at the end of July. Starting in late September, Chinese authorities began ramping up economic stimulus by lowering existing mortgage rates and hinting at further support.
“we believe [the] “This year’s 11.11 Festival is a critical moment and is poised to reflect the recovery trajectory in Q3 2024 and Q4 2024,” UOB Kay Hian analysts said in a report.
They predict sales in the consumer electronics category will be supported by trade-in programs, with Singles Day GMV increasing by 4% to 5%.
Alibaba said that with the benefit of government subsidies and the platform, pre-sales of home appliances in the first hour of October 14 surged more than seven times compared to the first hour last year.
According to JD.com, trading volume from October 14 to October 31 increased by double digits compared to the same period last year. The company claimed record sales of consumer electronics and appliances, without disclosing figures.
“Price competition among e-commerce platforms has generally slowed down this year, and appears to have regained some rationality after intense price competition,” Dave See, a partner at Oliver Wyman, said in a statement. He also cited the Chinese government’s announcement of economic stimulus measures and the recovery in consumer sentiment.
“In the early stages of Singles’ Day, categories such as home appliances and household appliances, outdoor goods, beauty and cosmetics, and pet supplies all performed well,” Xie said.
“Micro” shopping trends
A consumer trend that has emerged this year is in toys and collectibles based on games and popular anime series. This category is usually called IP in China.
“A lot of international brands have been fighting for licenses to come in here and do this too,” Cook said.
“There’s always a small trend every year on 11/11, and this year seems to be exactly that,” he said. “Something like that just came out of nowhere and turned into really, really big numbers.”
Yuk Liang, the company’s designer and head of the collector’s toy category, said the single’s more than 100,000 products are based on licenses for more than 1,000 characters from the games “Genshin” and “Arknights.” It will be released on Alibaba’s Tmall on the same day. Products include collectible cards, figures, and clothing.
Liang said the category also includes Lego and British toy company Jellycat, which launched a Valentine’s Day stuffed dog on Singles’ Day in China. The 7,000 dogs, priced at about $50 each, sold out in seconds, she said.
Japanese manga “Chiikawa” opened a Tmall store in late September, and more than 100,000 shoppers ordered $9.72 worth of products at the same time. Liang said it was a limited edition stuffed animal.
Liang said Taobao and Tmall started developing the IP category in 2017 and in 2021 elevated the category to one of the few Tier 1 segments in terms of product promotion and business priorities. He said most buyers are in their early 30s or younger and prefer to spend their money on products they believe will bring them happiness and other emotional satisfaction.
Emotions have “calmed down considerably”
Despite some of this growth, Singles’ Day in China remains toned down compared to previous years.
“Sentiment this year is quite different and much calmer,” wrote Ashley Dudalenok, founder of Chinese marketing consultancy Chozan. “Chinese consumers are not caught up in the ‘buy-buy’ frenzy; they want things.” [for] It’s not just a cheaper product, it’s a more expensive product than you actually need. ”
She predicts that this year’s Singles’ Day will be “slightly better” at best, and may be driven by different categories.
The shopping promotion officially ends on November 11th.
James Yang, head of Greater China retail at consulting firm Bain & Company, said the company is continuing the trend of the past two years and is “reducing expectations” for this year’s Singles’ Day.
Jingdong is scheduled to announce its quarterly results on November 14th, and Alibaba is scheduled to announce its results on November 15th.
