Hong Kong
CNN Business
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China’s Singles’ Day, of the World The biggest annual shopping eventknown for regularly breaking sales records.
Bonanza this year, ending on Friday and led by internet giant Alibaba
(TORTOISE) and JD.com
(JD)likely to be no exception: Analysts expect it to hit 1 trillion yuan ($140.8 billion) in sales for the first time.
Singles Day Usually a lunar eclipse two of the world’s most popular sales events – Black Friday and Cyber Monday – come together. The festival, also known as “Double 11,” is tied to China’s unofficial, anti-Valentine’s Day holiday, honoring those who are not in romantic relationships. The date – 11.11 – has been chosen since it was written, it appears as a four date, or single number.
But the tally is expected to be only a small increase – about 5% – on the 952.3 billion yuan ($134.2 billion) recorded last year. That marked a history growth slowed down.
Experts have highlighted two main factors behind the loss of momentum This year: Competition increases and consumer confidence declines.
The focus, they said, has shifted from generating big sales to keeping customers happy, especially in an uncertain environment.
Xiaofeng Wang, a principal analyst at research firm Forrester, told CNN Business that she believes Singles Day sales will cross the trillion yuan mark this week.
However, “it is not possible to sustain high growth year after year,” she said. “Final, [companies] know that’s not a sustainable strategy. That’s why they want to focus on customer experience and customer loyalty.”
Sales growth has slowed in recent years.
In 2021, the number for Singles’ Day rose 13%, “the smallest increase ever,” according to an analysis of Bain & Company.
Deborah Weinswig, CEO and founder of Coresight Research, a global research and consulting firm specializing in retail and technology, says it’s difficult to compare year-to-year growth when it comes to time frames. event has changed.
“When Alibaba first launched on November 11, the sale lasted 24 hours,” she noted. Now, the event can last about two weeks or more, depending on the retailer.
Weinswig added that suppliers are also facing a series of hurdles this time, tied to the broader economy.
Weinswig told CNN Business: “With China’s weak retail sales this year, waning consumer confidence, the ever-evolving zero-Covid policy, and an uncertain macroeconomic environment, 11.11 festive growth may slow, as consumers become more cautious in discretionary purchases.
“Additionally, increased government regulation of the tech and live-streaming industries could affect sales growth this year.”
According to one Bain . Survey34% of customers returning from Singles’ Day last year said they plan to spend less.
“Only 24% said they were planning to spend more – a markedly bleaker outlook than in 2021,” the advisory noted.
Bain experts added that although they could also see the festival reach 1 trillion yuan in revenue, “the relatively modest growth required for that feat is far from guaranteed.”
China is going through historical economic challenges for it continue to struggle with the impact of the strict “zero Covid” policy and the slowing global economy.
As a result, consumers have been returning. Last month, data showed Chinese retail sales rose 2.5% in September, down significantly from the 5.4% gain recorded in August.
This Singles Day, consumers are also affected by “shopping carnival fatigue”, as an increase in online sales events causes customers to “hoard all year” instead of saving to buy. once, in bulk, according to Kelly Liu, head of retail for Shanghai-based Bain’s Greater China.
Even so, the event will remain important for retailers, Liu added.
Wang, a Forrester analyst, says companies are responding to a spike in competition. For example, Alibaba has extended the deadline for customers to claim the “lowest price guarantee,” while also offering free shipping on returns, she noted.
Liu also said that some retailers have “started deliveries early to avoid bottlenecks” caused by Covid-related supply chain problems.
Singles Day “is not going anywhere,” concludes James Yang, a partner at Bain based in Hong Kong.
However, in terms of revenue, this figure is likely to decline. “This is not necessarily negative; it targets a maturing market with a growing consumer base. ”
