Chinese E-Commerce Giants Experience Decline in Sales on Singles’ Day, Reflecting Changing Consumer Sentiment
Chinese e-commerce players saw a decline in sales during this year’s Singles’ Day, indicating a shift in consumer sentiment. Data from third-party agency Syntun reveals that sales for the event, which ran for over two weeks, reached 277.6 billion renminbi ($38.5 billion), representing a year-on-year decrease of 9.75 percent. The number of parcels generated also decreased by approximately 16.65 percent compared to the previous year. Despite the decline in sales, the average customer unit price increased by 8.3 percent, reaching 272.01 renminbi ($37.82).
Looking at specific platforms, Tmall, JD.com, and Pinduoduo accounted for 60.02 percent, 27.86 percent, and 7.34 percent of sales, respectively. Other platforms made up 4.77 percent of the overall sales. This shift in consumer behavior reflects a sentiment of being willing to spend small for a bigger joy, according to Elena Gatti, the managing director of Azoya Europe.
A recent survey conducted by Bain & Company sheds further light on Chinese consumer sentiment. Over 77 percent of respondents stated that they planned to reduce or maintain the same level of spending for Singles’ Day, while 71 percent mentioned their intention to cut or keep their retail spending consistent through 2023.
The report suggests that retailers are not only facing discount fatigue but also dealing with a more general mood of restraint among consumers. This cautious approach to spending was particularly evident among Gen Z shoppers in larger cities and higher income brackets, who are yet to accumulate the spending power of their older peers.
Against this backdrop, Chinese e-commerce giants adopted different strategies to attract shoppers. Alibaba, which organized its first Singles’ Day since a reorganization, reported positive year-on-year growth in gross merchandise value, order number, and participating merchants. The platform offered substantial discounts, including 50 renminbi off for every 300-renminbi order, the largest discount in recent years. Alibaba also utilized AI technology to tag products with the lowest price compared to competing platforms, such as JD.com, Douyin, and Pinduoduo.
JD.com launched its first in-house livestreaming program, where its product manager-turned-anchor quoted lower prices based on those of its rivals. Pinduoduo and Douyin also implemented aggressive pricing strategies, with Pinduoduo’s 10 billion yuan subsidy initiative subsidizing steep discounts.
Luxury players participated in the online festival by discreetly offering special deals. Tmall featured flash sales on items such as Prada loafers and Valentino Rockstud stilettos, which were sold at 30 to 50 percent off. Transactions for luxury brands like Dior, Tiffany & Co., Bottega Veneta, and Valentino on JD.com increased significantly compared to the previous year.
This year’s Singles’ Day also witnessed a surge in sales for health and wellness categories, including athletic apparel, health supplements, and pet care. Consumers demonstrated an interest in upgrading their consumption in these categories to pursue quality.
Overall, the decline in sales during Singles’ Day reflects evolving consumer sentiment in China, with customers becoming more cautious in their spending habits. E-commerce players employed various strategies to adapt to this change and attract shoppers. The event also showcased increased interest in health and wellness products, as consumers sought to enhance their well-being.