As China’s largest shopping event, Singles’ Day, approaches on November 11, retail analysts and business owners are expressing cautious optimism. According to a report by Reuters, many are not expecting robust sales this year. The forecast suggests that sales will likely remain lukewarm, primarily due to consumers facing downgraded spending habits and a general pessimism regarding China’s economic situation.
Originally initiated by Alibaba in 2009, Singles’ Day was designed to encourage singles to treat themselves during the weeks of shopping festivities. The excitement peaks on November 11, as e-commerce platforms and brick-and-mortar stores across China engage in fierce price competitions to attract customers.
Wu Qian, a furniture retailer registered on JD.com, indicated that she hopes to use this event to clear out inventory and possibly make a small profit, though she does not anticipate significant overall sales growth from the promotion.
She noted that consumers are no longer waiting for shopping festivals to make purchases, thanks to the wide variety of options available year-round on Chinese e-commerce platforms.
China’s real estate market continues to struggle with a severe downturn, and a deteriorating international trade environment has contributed to slow economic growth and a lack of job opportunities.
Though the Chinese authorities announced several stronger economic stimulus measures in late September, many of the specifics remain unclear, leading to uncertainty about the positive effects these measures could have on consumer confidence.
Zheng Li, 46, shared that she used to place a high value on Singles’ Day, eagerly buying clothes and everyday items. However, her excitement has waned. “This year, I really can’t find any impulse to shop. Maybe I’ll buy my son a down jacket,” she said.
Data from Syntun estimates that last year, the Gross Merchandise Value (GMV) for major e-commerce platforms grew by just 2%, reaching 1.14 trillion yuan, a stark contrast to the once-common double-digit growth rates.
Independent e-commerce expert Lu Zhengwang pointed out that suppliers are becoming increasingly rational, with profit taking precedence over GMV as a core objective. However, achieving profitability is challenging due to fierce competition, which often requires businesses to resort to price wars to make sales.
For the past two years, as economic conditions have worsened, significant discounts have become essential for merchants. Even e-commerce giants like Alibaba and JD.com find themselves having to squeeze profits from thousands of small businesses in competition with cheaper platforms like Pinduoduo.
This year, however, with Alibaba rolling out a series of friendly measures for its domestic e-commerce sector, the pressure on merchants may begin to ease, a trend mirrored by similar announcements from JD.com and Pinduoduo.
