Singles Day shows strength of consumption

Singles Day has broken all records. Chinese consumers and e-commerce signal not just continued resilience but evident strength. By Monday midnight, the new record soared to 268.4 billion yuan ($38.3 billion) — 25 percent higher than last year.

Despite the continuing — and misleading — international headlines about China’s “slowing economy” and “consumption collapse”, Alibaba’s 11th Singles Day sales gala generated more revenue than the US’ Black Friday and Cyber Monday combined.

The Singles Day shopping festival is not just the world’s largest of its kind. It is also a vital barometer of Chinese consumption amid the United States-triggered tariff wars.

According to Alibaba, more than 200,000 brands participated in the Singles Day promotion — or “Double 11” as it is popularly known — with 1 million new products being offered and over 500 million buyers forecast to participate; that’s 100 million more than last year.

This year Alibaba used its highly popular online shopping platforms, Tmall and Taobao, but also business-to-business ecommerce platforms such as AliExpress and Lazada, the shopping site favored in Southeast Asia. As business began, the top regions of the Chinese mainland in terms of transactions were Guangdong, Zhejiang, Jiangsu and Shandong provinces, and Shanghai. However, Alibaba is also tapping regional, even international, consumers.

In the early hours, the most active overseas buyers included Americans, Australians and Japanese. Even before the festival on Monday, some 64 brands, such as Apple, Lancome, Dyson and L’Oreal, garnered millions of dollars in pre-orders, with Estée Lauder garnering a record $143 million.

Double 11 is now a big win-win opportunity not just for China but for international exporters from advanced and developing countries alike.

In China, the e-commerce explosion began in the mid-2010s. And as business has mobilized in the past half a decade, transactions occur smoothly with smartphones and volumes are soaring.

Today Chinese consumers use smartphones to browse top online shopping sites, such as Alibaba’s Taobao.com, and submit orders. It is the net effect of 15-20 years of innovation by Chinese smartphones, mobile operators and e-commerce giants.

In the early 2000s, NTT DoCoMo probably had the best mobile services, but since the Japanese operator failed to internationalize, it lost its edge. Finnish brand Nokia developed popular 2G and even 3G services, but moved too slowly into smartphones, and fell behind in the race.

That’s how Apple’s iPhone captured the early lead in the smartphone market. Yet it could not respond to a new generation of Chinese smartphones by Huawei and its peers — Xiaomi, Vivo, and Oppo — which now dominate 75 percent of the global smartphone market and are more cost-efficient and more innovative. Nor could the US companies, despite their early lead in the fixed-line internet, match the co-innovation of Chinese operators and e-commerce giants, such as Alibaba.

That’s why Chinese pioneers are already launching 5G services while pioneering 6G platforms. And that’s also why the White House keeps resorting to anti-competitive means seeking to undermine Huawei’s legitimate success.

Through the 16 months of higher US tariffs on Chinese goods, international headlines have predicted doom and gloom in China. And yet Chinese industrial production picked up in September, despite reduced export growth. Data for this year’s third quarter reflect resilience of consumption. And while US trade wars have made consumers cost-conscious, retail sales climbed to 7.8 percent thanks to a slate of policy supports.

Alibaba’s success and the new Double 11 record mimic the broader consumption trends in China. The same goes for urbanization. As the growth momentum has been shifting from the coastal first-tier cities to lower-tiered cities, gains in purchasing power in small- and mediumsized cities drove Double 11 sales.

When Alibaba’s e-commerce gala began on Monday, the China International Import Expo had just ended in Shanghai. In that bonanza, the value of intended deals exceeded $71 billion, up 23 percent from the first expo in 2018.

The Double 11 and import expo records and the consumption data for the past few quarters offer abundant evidence that Chinese consumption is far more resilient and stronger than the ideological headlines in the West presume.

The author is the founder of Difference Group. He has served at the India, China and America Institute (US), Shanghai Institutes for International Studies (China) and the EU Center (Singapore). The views don’t necessarily represent those of China Daily.

SHI YU / CHINA DAILY