HONG KONG (AP) — Businesses and consumers in China found the annual Singles’ Day shopping festival less attractive this year amid a sluggish economy, forcing e-commerce firms to look abroad for growth.
Online service provider and e-commerce platform Alibaba started the now-famous event on Nov. 11, 2009, offering attractive discounts to entice shoppers to spend more. The extravaganza, also known as “Double 11,” has since expanded to other platforms in China — like JD.com and Pinduoduo — and abroad.
It has long been regarded as a barometer of consumer sentiment.
While Singles’ Day was previously a one-day event, shopping platforms in China now kickstart the festival weeks ahead to drum up sales volume. Even some brick-and-mortar stores join the festival by launching sales campaigns and hanging promotional banners and posters in the hopes of luring shoppers.
But amid China’s lagging domestic economy, dragged down by a real estate crisis and deflationary pressures, consumers no longer go all out during the shopping extravaganza.
Meanwhile, e-commerce platforms grappling with a slowing domestic market have turned to overseas markets to seek new growth, offering promotions like global free shipping and allowing merchants to sell worldwide with ease.
Alibaba, for example, said in a blog post on its Alizila site that some 70,000 merchants saw sales double with global free shipping. In markets like Singapore and Hong Kong, new customers also doubled, the e-commerce company said.
Since the festival began in late October, “I have only spent a few hundred yuan on daily necessities,” said Wang Haihua, who owns a fitness center in the capital, Beijing.
Wang said that the prices offered on e-commerce platforms during Singles’ Day are not necessarily cheaper than usual. “They’re all tricks and we’ve seen through it over the years,” she said.
Zhang Jiewei, a 34-year-old who runs a barber shop in the city of Xi’an, echoed Wang’s sentiments, saying that he no longer trusts Singles’ Day promotions as some merchants tend to raise the usual prices before offering a discount, giving consumers the illusion they are getting a deal.
“I used to buy a lot two or three years ago and I even purchased a mobile phone (during Singles’ Day),” he said. However, following the coronavirus pandemic, he stopped “because of lower income.”
“I am not going to buy anything this year,” Zhang said.
Some experts say that Beijing’s recent stimulus measures have had little impact on boosting consumer confidence.
“People are not interested in spending and are cutting back on big-ticket items,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Since October 2022, the weak economy means that everything has been on discount year-round, 11.11 is not going to bring in more discounts than the month before.”