Double 11 came and went this year without the star-studded celebrations or mind-boggling revenue reveals. For the first time in 14 years, Alibaba and JD.com have remained close-lipped about the November 11 Singles Day results. Syntun, an independent big data monitoring company, reported the total GMV from all major e-commerce platforms surpassed $140.5 billion (1 trillion RMB) for the first time for China's most important shopping festival.
"In terms of communications from the platform companies around the festival, there's been a shift away from celebrating excessive consumption and emphasizing gross merchandise value (GMV)," Jacob Cooke, the CEO of e-commerce consultancy WPIC Marketing + Technologies, told Tech Asia. "The shift has been going on for a few years now, and that's related to common prosperity, the anti-monopoly drive," he added, referring to President Xi Jinping's ongoing drive to curb the influence of big tech.
Singles Day started as a one-day event but has morphed into an 18-day online campaign. This year's Singles Day featured over 290,000 brands from over 90 countries and regions across 7,000 product categories.
“The Shanghai lockdown early this year dramatically impacted 618. Understandably, the Shanghai consumers, as well as the whole country had a huge trauma from such an unexpected harsh reaction, hence were suffering PTSD," shared Elisa Harca, co-founder and Asia CEO of marketing agency Red Ant. "However, we are pleased to see that consumer appetite for shopping has recovered somewhat, and 11.11 for most brands we work with was positive. Most of the brands met their 11.11 targets, or were close enough to doing so to help them feel positive about leaning in to 2023."
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Are the subdued results an indication that the Chinese consumer is changing? Consumer demand was more muted than in previous years, with analysts attributing the results to a lack of spending power and dampened desire to spend because of the hardline zero-COVID policy.
As the Chinese market matures amid economic uncertainty, the exponential phase of China's e-commerce market growth seems to have ended. Now the focus for brands and retailers has shifted away from heavy discounting to optimizing consumer experience and retention.
Jing Daily reported that Dai Shan, President of Alibaba's Core Domestic E-Commerce, pointed out that the future of Double 11 is no longer that of a machine producing ever-higher GMVs, but rather an important platform for a better consumer experience and business growth.
Its rival JD.com did not publish GMV or sales growth rate either. Alibaba did not hold its usual celebrity-studded gala show this year nor any in-person media events, citing the COVID-19 pandemic.
The e-commerce platform's growth merchandising value (GMV) was widely predicted to post flat to low single-digit growth, underscoring weak Chinese consumer sentiment hit by stringent COVID-19 curbs and a sharply slowing economy.
In a press release, Alibaba said the event had "delivered results in line with last year's GMV performance despite macro challenges and COVID-related impact." GMV growth has been slowing in recent editions of Singles Day—the world's biggest online shopping festival that has, despite its name, evolved into a multiweek event and is a key barometer of Chinese retail demand.
According to Reuters Consultancy Syntun, "Alibaba and other Chinese e-commerce firms holding Singles Day shopping events together logged a 4.7% decline in sales for the first 12 hours of the final day." Last year's 8.5% GMV rise for Alibaba's platforms was its lowest-ever growth rate, following a 26% jump in 2020. Before 2020, the festival was a one-day event.
Citi analysts said this week they were conservatively forecasting Alibaba's GMV for the event to range from 545 billion yuan to 560 billion yuan ($75 billion to $77 billion), with growth of 0.9% to 3.6%.
"In recent years, livestreaming seems to have created a quick way for brands to get famous and sales boomed," Dave Xie, a Shanghai-based principal of consultancy Oliver Wyman, told Bloomberg. "Amid the recent falls of the superstar livestreamers, brands are now actively speeding up the development of their own livestreaming studios" in order to cut ties with the top influencers, while retailers are also shifting to smaller platforms, he said.
"Weak buying sentiment among mainland Chinese shoppers and logistical disruptions will persist amid ongoing mobility curbs under China's Covid-Zero policy," wrote Bloomberg Intelligence analysts Catherine Lim and Trini Tan.
"Overall platform diversification is a trend, driven by consumer behavior and brand strategy," Sherri He, Managing Director of Kearney Greater China told Bloomberg. More and more brands have opened stores on JD.com and other platforms in the last year, she said.
Apart from rising rivalries, this year's Singles Day was weighed down by China's slow economic expansion. Gross domestic product in the third quarter rose 3.9%, while retail sales growth slowed to 2.5% in September from August's 5.4% increase, according to data from the Chinese government.
"Singles' Day has been totally diluted in terms of the impact," William Yuen, Investment Director at Invesco Hong Kong Ltd. told Bloomberg. "No one had much expectation about whether they would beat or not. I think it becomes more like a formality or a numbers game."
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