Spending boom on Black Friday not ‘sustainable’
Chinese cross-border trade boosts US online sales
Although this year’s Black Friday online sales are expected to set a record high, as the US economy tanks and offline traffic sees a significant reduction amid coronavirus case spikes, it is likely that Black Friday sales could remain flat compared to last year, or even post a small drop, analysts said.
According to estimates by Adobe Analytics, Black Friday is projected to generate $10.3 billion in online sales, a 39 percent bump from a year ago. The Economist estimates that the share of online shopping could close to half of total sales, or $20.6 billion this year.
Last year, Black Friday generated $23 billion in sales, the Economist said.
While the Black Friday sales could offer help to the US economy, analysts noted that consumption could be worse than expected.
“Most of the money American consumers spend on Black Friday is for household items, which is spurred by the country’s fiscal and monetary policies. This is not sustainable because once the subsidies are cut, they will immediately halt spending,” Tian Yun, a vice director of the Beijing Economic Operation Association,said on Friday, noting that such model compares to spending expansion driven by income gains, which leads to “genuine consumption growth.”
The US unemployment rate shot up faster than any other developed economies during the pandemic. Jobless claims in the US rose last week to 778,000, underscoring how the COVID-19 could hamper employment in the nation and deprive its residents of income.
The tariffs imposed on Chinese products during the year-long trade war, which retailers tend to pass on to consumers, also drove up the cost of spending, observers noted.
Analysts are also pessimistic on US consumption ability next year as the fallout of the pandemic lingers on. “The chance that Washington will soon release another batch of fiscal stimulus policies is very slim, as the fight for leadership of the Senate between the Democratic Party and the Republican Party is turning white-hot,” Tian noted.
In the third quarter, the US GDP grew at a 33.1 percent annualized rate.
For overseas brands that are faring poorly offline during the Black Friday period, the Chinese market that quickly recovered after the epidemic is particularly important.
Tmall International said more than 80 US outlet malls entered its overseas direct purchases. The turnover of overseas direct purchase of imported goods has increased by more than 120 percent year-on-year since the promotion started.
Business in the first three days of Black Friday on its platform increased by about 30 percent compared with the same period last year, B2B cross-border e-commerce marketplace DHgate said.