China’s biggest online shopping spree ends on Monday, with analysts and investors watching for signs that consumption is recovering in the world’s second-largest economy following recent efforts by Beijing to boost activity.
‘Singles Day’ – launched by tech giant Alibaba in 2009 – has become an annual blockbuster period for retail, with days of discounts luring customers to the country’s online shopping platforms.
The name is a reference to the four in the date of November 11, or “11.11” – the tongue-in-cheek celebration of singleness is a major sales driver for Alibaba and its main competitor, JD.com.
Neither firm revealed detailed sales figures on last year’s Singles Day for the second time in a row, with Alibaba saying only that it registered growth during the period.
Sluggish domestic consumption is among the key issues now facing policymakers in China, which has struggled to achieve a full post-pandemic recovery.
Beijing has in recent weeks announced a raft of the most aggressive measures in years aimed at boosting growth, including interest rate cuts and raising the debt limit for local governments.
But many economists argue that in the absence of large-scale fiscal stimulus aimed at boosting consumer spending, a return to the country’s robust pre-pandemic trajectory may be difficult to achieve.
This year’s Singles Day could be a major boon for retail giants as analysts watch for signs that recent measures are having an impact.
Analysts at ING banking group said in a note last week that they expect “solid growth numbers” from the event, which they said should “well exceed overall consumption growth momentum.”
Consumer prices in China rose at a slower pace in October, official data showed on Saturday, in a further sign of weak demand.
Singles Day 2024 “is expected to generate more than 1.2 trillion yuan ($167 billion)… representing a growth of 15 percent compared to the previous year,” wrote VO2 Asia Pacific, a consultancy specializing in the digital economy.
While the promotional campaigns could be effective in boosting sales in the short term, managing partner Vincent Marion warned that the strategy could have negative consequences.
“Many consumers buy in bulk to reach discount thresholds, only to return the products,” says Marion, who warns that the practice “erodes profit margins and damages brand perception.”
Alibaba, like its main rival JD.com, withheld 2022 sales figures for the Singles Day period for the first time in history, but said sales were flat from the previous year.
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