Cupid’s Singles Day arrow wide sign for China’s weary shoppers

Singles Day has drawn a lukewarm response from Chinese shoppers this year, the latest indication that consumers and retailers in the world’s biggest market remain spooked by Xi Jinping’s zero-Covid policy and his crackdown on excess.

Jack Ma’s Alibaba Group spent years building November 11 into the biggest retail event on the planet, hiring the services of celebrities including American hip hop producer Pharrell Williams and Australian actress Nicole Kidman. revive the hype.

However, this year Alibaba did not disclose full sales results for the first time in the history of the shopping festival but said on Saturday that the results were “in line” with 2021 performance, indicating the end of a year of rapid growth.

Jacob Cooke, chief executive of WPIC Marketing + Technologies, which is based in Beijing, said the results show that Alibaba has “clearly shifted” from celebrating excessive consumption.

“Part of it is economic headwinds, but also the consumer market has matured and the days of 30 percent growth . . . are far behind us,” said Cooke, adding that “general prosperity and anti-monopoly drive are also factors.”

According to Bain, a consultancy, Single Day from 2014 to 2020 achieved annual growth between 25 percent and 50 percent. Last year’s growth slowed to 13 percent.

Jomblo Day, originally conceived as a celebration of being single among Chinese students and numerically written as 11.11, has been a boon for global luxury brands and is a bellwether for the world’s largest consumer market.

But this year’s event comes at a bleak point for China’s economy.

Xi last month secured an unprecedented third five-year term in power, sparking fears erosion of market-oriented reforms which underpinned decades of growth in China. Since the end of 2020, the Chinese president’s “public prosperity” campaign has sought to bring billionaires, including Ma, to heel, control private monopolies and eradicate the culture of excess and vice from China’s youth.

1.4bn Chinese are also under strict coronavirus control as the Xi administration prioritizes eradicating the Covid-19 outbreak over economic growth. While Beijing on Friday eased some quarantine rules and contact tracingFears of city-wide lockdowns remain as cases rise to their highest level in months.

He Dan, 31, who works in hospitality in Changsha, central China, estimated that his income and expenses have dropped by almost a third since the start of the pandemic.

“I must spend less. . . I couldn’t travel so I lost my consulting job,” he said. “My feelings for the future? I want to curse. The Covid policy is stupid.”

Shi Wei, 32, an administrative professional at a multinational group in Beijing, is trying to save more and avoid spending because of the “uncertainty” associated with the pandemic.

“If you’re locked up at home and can’t work for months, no one knows what will happen to your job,” he said.

Still, Cooke, WPIC, said the shopping event remains the most important day of the year for many global brands given more than RMb1tn ($140bn) of spending. A slower growth rate is a sign of market maturity.

While Alibaba is under pressure, Cooke also noted the success of Douyin, TikTok’s sister app that has 700 million daily users, and noted the high demand in the health and fitness, pet, outdoor and sports categories, “reflecting the lifestyle changes taking place in China”.

Chui Xue, an operations executive with Alibaba, said the results showed “the emergence of a new consumption trend with untapped potential”.

“We have witnessed the resilience and vibrancy of China’s consumption sector,” he added.

HSBC analysts said that while the consumption picture varied widely in different cities in China – largely depending on the intensity of the Covid-19 restrictions – the level of national consumer confidence had fallen to a near record. Retail sales growth was “below” pre-pandemic levels in recent months.

Nomura China chief economist Ting Lu warned that the road to reopening could be “slow, painful and bumpy”.

“The number of Covid cases may rise again after the recent surge, so de facto lockdowns are likely to be tougher than de jure lockdowns, as local officials still believe their performance is determined by avoiding massive infections,” he said.

Even in 2023 “the release of pent-up demand may moderate and settle below pre-Covid levels”.

Additional reporting by Qianer Liu and Eleanor Olcott in Hong Kong

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