China’s Singles Day shopping festival, which ends on November 11, is expected to see a decrease in consumer spending this year, according to a survey by Bain and Company. The survey, which interviewed over 3,000 consumers in China, revealed that the majority of consumers plan to limit their spending during this year’s festival. The event, originally started by Alibaba, has now expanded into a multi-week period of shopping promotions across various online platforms in China.
The survey also found that excitement for Singles Day has decreased, with nearly half of the consumers stating that they will be turning to cheaper or private label products. Private label products are known to be more affordable compared to well-known brands. In addition, 77% of consumers surveyed stated that they do not plan to increase their spending for this year’s festival. While this percentage is slightly higher than last year’s 76%, it is significantly higher than the 49% reported in 2021.
The slowdown in economic growth and concerns about future income have impacted consumer spending in China in recent years. James Yang, a partner at Bain, commented on the current consumer sentiment, stating that it remains lower than pre-pandemic levels, leading to more conscious spending among consumers.
Bain expects an increase in stocking up of consumables during this year’s festival. However, the total number of sales for Singles Day has not been disclosed by Alibaba and JD.com, the online retail giant. Last year, these companies declined to disclose the gross merchandise value for Singles Day. However, Bain estimates that the total value, including other platforms, rose by 3% to 934 billion yuan ($128.25 billion) in 2022.
Livestreaming and content-led e-commerce also play a significant role in the festival. Livestreaming and social media platforms, such as Douyin (the Chinese version of TikTok), have become popular ways for retailers to sell products directly to consumers. Bain’s Yang believes that the livestreaming trend will continue to increase in the future.
In terms of market comparison, China’s market figures for Singles Day significantly outweigh the online spending of U.S. consumers during Thanksgiving, Black Friday, and Cyber Monday. Last year, the total GMV for Singles Day, including livestreaming and content-led e-commerce, exceeded 1 trillion yuan ($140 billion), while U.S. consumers spent $35.3 billion during the equivalent U.S. holiday shopping week.
Different consumer segments in China are also spending differently. Higher-income individuals are still spending, while the blue-collar population is cutting back. The middle class fluctuates between cautious spending and trade-offs in their purchasing decisions.
Overall, this year’s Singles Day shopping festival in China is expected to witness a decrease in consumer spending, as consumers prioritize cost-consciousness and seek out more affordable alternatives.
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