Chinese splurge in world’s largest shopping festival
Chinese consumers spent over a hundred billion dollars during this year’s Singles’ Day shopping festival, signaling a rebound in consumption as China recovers from the coronavirus pandemic and a battering of the economy.
From Nov. 1 to Nov. 11, shoppers spent 498.2 billion yuan ($75.1 billion) on Taobao and Tmall, the e-commerce platforms operated by Alibaba, China’s largest e-commerce company.
The final sales figure exceeded last year’s $38.4 billion over 24 hours, after Alibaba extended its sales period this year for the first time as it sought to help boost sales for merchants affected by the coronavirus pandemic.
On rival platform JD.com, consumers racked up 271.5 billion yuan ($40.9 billion) in sales over the same period.
The annual Singles’ Day shopping festival, the world’s largest of its kind, offers shoppers generous discounts on a variety of products, from fresh produce to luxury items.
Merchants big and small, from small online stores to international brands like Apple, Nike and L’Oreal, participate in the festival by slashing prices on their products.
The annual shopping festival is closely watched as a barometer for consumption in China. Alibaba, which pioneered the shopping festival, held its first Singles’ Day sale in 2009. Over the past decade, the shopping bonanza has become the world’s largest, regularly dwarfing Black Friday and Cyber Monday sales in the U.S.
The Singles’ Day festival is named as such because the main shopping day falls on Nov. 11, which when written numerically as 11.11 resembles “bare branches,” a Chinese expression for the single and unattached.
Analysts expected Chinese consumers to spend more on imported products and foreign luxury brands, since many Chinese tourists were unable to travel internationally due to the coronavirus pandemic and tightened travel restrictions.
A survey by consulting firm Oliver Wyman found that 86% of Chinese consumers were willing to spend the same as or more than during last year’s Singles’ Day festival.
“In the last six months or so, wealthy households have actually spent more money,” said Sean Shen, customer and strategy competence leader for EY in Greater China. “We also see that purchases of luxury segment products are increasing because of the international travel restrictions.”
In 2018, Chinese consumers spent about 770 billion yuan ($116.3 billion) on luxury items, accounting for about a third of the global spend, with each luxury-consuming household spending an average of 80,000 yuan annually ($12,089), according to a 2019 McKinsey report on luxury.
To help merchants cope with the impact from the coronavirus, online extended the shopping festival period this year in hopes of boosting sales.
Both Alibaba and JD.com, the country’s two biggest e-commerce companies, began offering discounts on Oct. 21, three weeks ahead of Nov. 11. Some brands and merchants that slashed their prices booked hundreds of millions of yuan (tens of millions of dollars) in sales just hours into the shopping festival.