China’s Singles’ Day shopping festival is losing its luster as the Chinese economy lags

HONG KONG (AP) — Both retailers and consumers found Monday’s “Singles’ Day” shopping festival less glitzy than in previous years as e-commerce companies look overseas for growth.

The annual event, named after the numeric form of its November 11 date, was launched by e-commerce platform Alibaba (BABA, 9988.HK), which offered attractive discounts to entice shoppers to spend big. The extravaganza has since expanded to other platforms such as JD.com (JD, 9618.HK) and Pinduoduo (PDD) in China and abroad.

While Singles’ Day was once a one-day event, shopping platforms in China are now launching the festival weeks in advance to boost sales volume. The festival is also traditionally considered a barometer of consumer sentiment.

But amid China’s weakening domestic economy, hit by a housing crisis and deflationary pressures, consumers are no longer going all out during the shopping extravaganza.

“I only spent a few hundred yuan on daily necessities,” said Wang Haihua, who owns a fitness center in Beijing.

Wang said prices offered on e-commerce platforms during Singles’ Day are not necessarily cheaper than usual.

“These are all tricks and we have seen through them over the years,” she said.

Zhang Jiewei, a 34-year-old who runs a barbershop in the city of Xi’an, echoed Wang’s sentiments and said he no longer trusts Singles’ Day promotions as some retailers tend to mark up the usual price of a product before offering a discount, giving consumers the illusion that they are getting a bargain.

“Two or three years ago I bought a lot and even bought a mobile phone (during Singles’ Day),” he said.

“After the pandemic, I stopped because of the lower income. “I won’t buy anything this year,” Zhang added.

Some experts say Beijing’s recent stimulus measures have done little to boost consumer confidence.

“People are not interested in spending money and are limiting purchases of expensive items,” said Shaun Rein, founder and managing director of China Market Research Group in Shanghai. “Since October 2022, everything has been discounted all year round due to the weak economy, November 11th will not bring any more discounts than the previous month.”

Rein said he expects modest growth for the Singles’ Day shopping festival as consumers curb spending in anticipation of tough economic times.

However, categories such as activewear and fitness performed well as customers “swapped a Gucci bag for Lululemon activewear,” he said.

Platforms such as JD.com and Alibaba, which operate e-commerce platforms Taobao and Tmall, used to publish the value of transactions made during the festival but have since stopped disclosing total numbers. While annual growth used to be in the double digits, estimates for the latest figures have fallen to low single digit growth.

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