Serve consumers well to make them lead growth
Unlike the dramatic US presidential election or the surprising Brexit vote, one can almost be sure about another massive surge in Singles’ Day sales this year. Since online shopping has become so popular in China, more and more international brands and retailers are participating in the shopping festival that Nov 11 has become to cash in on the craze.
After a year-on-year increase of 54 percent in 2015, Fung Global Retail & Technology forecast that this year’s shopping frenzy would see a 40-percent increase to hit $20 billion.
That is a bold forecast. After all, US consumers spent only $5.8 billion online on Black Friday and its webbased CyberMonday last year. It is difficult to understand why Chinese consumers, with an average earning a quarter of their US counterparts, spent over two times more at their year-end shopping day. With little change in their incomes, will Chinese consumers be able to widen that expenditure gap to three-fold this year? Perhaps yes. Fung Global has based its 2016 forecast on a tailwind from Chinese online shoppers’ surging demand for overseas goods and high expectations from the extensive marketing campaign by China’s leading e-business giants like Alibaba, which would use virtual and augmented reality features this year.
E-business giants, online retailers and Chinese regulators all should do their bit to ensure consumers get the goods and services they pay for, not only on Singles’ Day but also on other days of the year.
It is reported that Alibaba will not only pilot Buy+, a VR headset which will allow shoppers to walk around simulated bricks-and-mortar stores around the globe and simply nod to confirm the purchase of items, it has also released a location-based augmented reality PokemonGo-style mobile app ahead of Singles’ Day to help drive traffic from online stores to the physical stores of related merchants.
Deep discounts and fancy high-tech user experience will certainly help woo more Chinese online shoppers. Nevertheless, it is the underlying resilience of Chinese consumers who continue to fuel double-digit consumption growth in the world’s second-largest economy despite all the difficulties and uncertainties at home and abroad that best explains the online shopping frenzy.
Though the economic slowdown has more or less bitten into their pockets, the income level of Chinese consumers is still growing, and it will gradually but steadily lift China from a middleincome country toward a higher-income one. As the country’s export- and investment-led growth loses steam, it is increasingly important to maintain the sound momentum of consumption growth to stabilize overall economic growth.
Though Singles’ Day sales do not necessarily make a big portion of Chinese consumers’ annual expenditure, its increase will testify both their confidence to spend more and their growing purchasing power.
It is hoped this year’s Singles Day will create another newsales record. But it should also be realized that high expectations are not enough to make Fung Global’s optimistic forecast to come true.
China’s box office should be a sign of warning in this regard.
After soaring by about 30 percent for several years and rocketing by more than 50 percent in the first quarter of this year, China’s box office suddenly fell 7 percent in the second quarter and slumped by 14.9 percent in the third, shattering many people’s hopes that it would reach 60 billion yuan ($8.86 billion) this year.
People blamed the poor quality of movies for the unexpected slowdown of this once-promising market. The same could hold true for Singles’ Day sales if online retailers and companies do not meet Chinese consumers’ demand for quality goods and services. E-business giants, online retailers and Chinese regulators all should do their bit to ensure consumers get the goods and services they pay for, not only on Singles’ Day but also on other days of the year.