Alibaba Group, China’s leading e-commerce giant, has reported a “robust growth” in sales and an all-time high number of shoppers during the Singles’ Day event this year, a shopping festival that has expanded far beyond its traditional one-day event on November 11. However, despite the positive growth indicators, the overall results for the 2024 Singles’ Day reflect deeper trends in Chinese consumer behavior amid a challenging economic climate.

Singles’ Day, which originated as a 24-hour event, has evolved into a weeks-long shopping extravaganza that runs for up to a month. This year, the event kicked off on October 14 and concluded on November 11, marking its longest run yet. The festival has traditionally been a barometer for consumer confidence in China, but this year, with a slowing economy, rising household debt, and a continuing property sector crisis, expectations were muted. While Alibaba Group refrained from releasing total sales figures, it did reveal that 45 brands, including major names like Apple, Haier, Midea, and Xiaomi, each surpassed 1 billion yuan ($138.62 million) in Gross Merchandise Value (GMV), a key metric for measuring sales volume.

JD.com, Alibaba’s main rival in China’s e-commerce market, did not disclose specific sales numbers either but reported a 20% increase in the number of shoppers compared to the previous year, signaling that while the economic backdrop remains challenging, consumer interest in discounted goods persists. Data from market research firm Syntun estimated that total sales across major platforms amounted to 1.44 trillion yuan, a 26.6% increase compared to last year’s event, which was extended by an additional 10 days.

Despite the increase in sales, the atmosphere surrounding this year’s Singles’ Day was notably subdued. Following a prolonged property market slump and broader macroeconomic challenges, Chinese consumers are more cautious with their spending. As a result, there has been a noticeable shift in consumer behavior, with many seeking out heavy discounts, especially from platforms like Pinduoduo, which have risen in popularity by offering aggressive price cuts. ByteDance’s Douyin, the Chinese version of TikTok, has also made inroads into the e-commerce space by targeting discount-conscious consumers, further intensifying competition for platforms like Alibaba and JD.com.

According to analysts, one major aspect contributing to the success of the event was the widespread availability of discount coupons, often up to 50 yuan off purchases exceeding 300 yuan. While this helped drive more sales, it also led to higher rates of order cancellations. Many consumers, eager to unlock discounts, would make larger purchases only to return or cancel part of their orders once the discount threshold was reached, revealing a shift toward a “discount mindset.”

“We are at the peak of a consumption downgrade. People are so deep in a discount mindset and they feel the need to save every yuan they can,” said Yaling Jiang, founder of research consultancy ApertureChina. This trend highlights the growing divide between consumer spending and broader economic performance in China. While government stimulus measures, such as the 150 billion yuan trade-in subsidy scheme aimed at encouraging consumption of household appliances, did help drive sales of larger items like air conditioners and robot vacuum cleaners, many analysts believe these measures were not the primary factor behind the increase in sales this year.

Jacob Cooke, CEO of WPIC Marketing + Technologies, echoed this sentiment, pointing out that while government interventions were helpful, they were unlikely to have been a significant contributor to the Singles’ Day sales surge. He suggested that any major impact from government measures will likely be more noticeable in future events like the mid-year 618 shopping festival.

Despite the overall subdued sentiment, certain sectors of the market saw surprising growth during the event. Household appliances such as smart toilets and energy-efficient air conditioners performed well, benefiting from government subsidies that aimed to boost consumption. Similarly, consumer electronics such as smartphones and home gadgets enjoyed healthy sales, although not at the levels of previous years.

Unexpected growth was also seen in niche markets, including collectibles and hobby-related goods. Categories like anime merchandise, comic books, and gaming-related items surged in popularity, particularly among younger consumers. Brands like MiHoYo, Pop Mart, Paperpresented, and Jellycat exceeded 100 million yuan in GMV, driven largely by young buyers. For example, Shan Yin, a 23-year-old student from Hangzhou, spent 3,200 yuan on gaming products and anime collectibles as a way to manage the stress of her engineering studies. “Cosplay and buying this merchandise are ways for me to regulate my emotions,” Shan said, underscoring how shopping behavior has evolved to cater to emotional and psychological needs, especially among the youth.

The trends seen this year reflect broader shifts in Chinese consumer habits. As the economy continues to slow down, Chinese consumers are seeking value for money, gravitating toward discounts and promotions, while also increasingly turning to niche products that cater to personal interests and hobbies. This year’s Singles’ Day may have demonstrated resilience in the e-commerce sector, but it also highlighted a shift towards more cautious spending, with consumers increasingly focused on maximizing value rather than splurging on big-ticket items.

In conclusion, while Singles’ Day 2024 saw an overall uptick in sales, it also laid bare the challenges faced by China’s e-commerce giants in a tough economic environment. The success of the event, driven largely by deep discounts and government incentives, offers a mixed picture of a market grappling with consumer caution, a shift in purchasing priorities, and a new era of e-commerce marked by greater price sensitivity. Going forward, the focus will likely be on finding innovative ways to capture consumer attention amidst a shifting economic landscape, with more emphasis on value-driven consumption and the growing importance of niche markets like collectibles.

(Adapted from Reuters.com)