On Singles’ Day 2023, Chinese consumers are looking for cheap prices and local brands – South China Morning Post

More than three-quarters of 3,000 shoppers recently surveyed by Bain & Co plan to spend less during this year’s Singles’ Day or maintain their spending at 2022 levels, according to the US consultancy’s report published on Tuesday.
On Singles Day 2023 Chinese consumers are looking for cheap

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Singles’ Day: The world’s largest online shopping event takes place amid the slowdown in China’s economy

Singles’ Day: The world’s largest online shopping event takes place amid the slowdown in China’s economy

“The macroeconomic headwinds in China that are making consumers more value conscious have been well publicized,” the report said. These include “a slowdown in the country’s previously strong GDP growth, relative weakness in consumer confidence and concerns about the housing market.”

“The [online shopping] Platforms are trying to differentiate themselves to fight for consumers as they see the growth of [China’s] “The e-commerce population is gradually slowing down at the current high penetration rate,” said Kenny Yao, director of Shanghai-based global consulting firm AlixPartners. “If they can’t offer consumers a differentiated experience, the easiest way to attract them is through lower prices.”

Alibaba Group Holding’s main mainland retail platforms, including Taobao and Tmall Group, remain the top online marketplaces for Chinese consumers on Singles’ Day this year, according to a recent report from AlixPartners. Of 2,150 local shoppers surveyed by the US consulting firm, 92 percent said they plan to shop on Taobao or Tmall during the shopping festival.

Faced with increased competition and a weakening economy, China’s e-commerce industry is not expecting another one at this year’s Singles’ Day – also known as “11.11”, a reference to the traditional 24-hour shopping extravaganza on November 11th Record sales recorded.

Both JD.com and Hangzhou-based Alibaba, owner of the South China Morning Post, last year for the first time held back from disclosing their gross merchandise volume or final sales figures for the annual online and offline shopping festival that was taking place as China began lifting strict pandemic control measures.

Alibaba and JD.com are introducing low-price strategies for Singles’ Day in light of the difficult economic situation

“This year’s Double 11 is very different from last year as it marks an important defensive war of traditional e-commerce sites against live streaming platforms,” ​​said Zhang Yi, founder and chief analyst at market consultancy iiMedia. “Live streaming e-commerce has grown so quickly thanks to the low prices it offers as well as the low cost of acquiring customers through short videos.”

Alibaba’s Taobao and Tmall Group said they are focused on “serving Chinese consumers looking for value-for-money products by offering the best deals” as their platforms offer more than 80 million products at the lowest prices this year become.

Beijing-based rival JD.com, meanwhile, has offered a 10 billion yuan ($1.4 billion) subsidy campaign since March, billed as “its largest sales promotion event in history.”

The company also offers a 30-day best price guarantee on more than 800 million products. If shoppers find cheaper goods elsewhere for items they purchased on JD.com during the promotion, the e-commerce company will compensate them for the price difference.

1699701390 573 On Singles Day 2023 Chinese consumers are looking for cheapWorkers prepare packages for delivery ahead of the Singles’ Day shopping festival at a logistics center in Nanjing, eastern Jiangsu province, Nov. 10, 2023. Photo: Agence France Press

While it remains to be seen what Chinese e-commerce players’ final sales figures will be this year, these platforms are expected to keep these numbers in check just like last year as consumers are sluggish this year ‘spend a lot of money’ day.

“I have no interest in buying anything other than daily necessities, no matter how much the platforms advertise their discounts,” said 26-year-old Emily Zhao, an employee at an internet company in Shanghai.

Zhao, a long-time video game player, said she spent nearly 6,000 yuan to buy a handheld game console on Singles’ Day last year, but lost passion for buying new devices this year.

She pointed out that there is a “decline in consumption” trend this year due to fewer people flocking to malls in Shanghai. In addition, numerous Internet companies, including the company she works for, began laying off employees last year.1699701392 352 On Singles Day 2023 Chinese consumers are looking for cheapA worker hands over packages for delivery ahead of the Singles’ Day shopping festival at a logistics center in Nanjing, eastern Jiangsu province, Nov. 10, 2023. Photo: Agence France Press

Another online consumer who has limited his spending for this year’s Singles’ Day is Shenzhen-based Capy Ding, who has stocked up on contact lenses and various skin care products at past festivals.

“In previous years, I usually spent about 2,000 yuan to buy enough contact lenses to last a year, but this time I can only stock up for half a year with the same amount of money,” Ding said. “That means prices have doubled. I definitely tightened my belt this year.”

Mothers and the younger generation born in third- and fourth-tier cities after 2000 preferred local brands and purchased local beauty products, home appliances and sports products from well-known domestic brands, Pinduoduo said in late October. Middle-class employees and consumers in first-class cities are buying more everyday goods like fruit and cat food, as well as digital products.

Pinduoduo sees an increase in sales during the Singles’ Day promotion

The rise of domestic brands that have lower prices and market aggressively to local consumers has also increasingly threatened the market share of foreign brands.

“Many foreign brands have historically created a high-end image that seemed inherently attractive to Chinese consumers,” said Yao of AlixPartners. “But this approach could become more difficult in the future.”

Instead of pushing through big discounts, Japanese retailer Muji said Singles’ Day offered the company a greater opportunity to “interact and communicate” with local consumers.

“We are not currently cutting prices drastically to achieve a certain level of performance. “This is not what we are doing now,” said Winnie Shao, chief marketing officer at Muji China, during a media interview in Shanghai on Thursday.

“As people have more freedom this year, whether they travel or go outdoors, some lightweight items that can be used at home or easily taken out have become an important category in this round of campaigns,” Shao said the post-pandemic situation in Chinese retail.

1699701394 377 On Singles Day 2023 Chinese consumers are looking for cheapVisitors stand at a stand of Ryohin Keikaku Co, the operator of Japanese retailer Muji, at the China International Import Expo in Shanghai on November 6, 2023. Photo: Kyodo

Despite the gloomy mood among consumers, the latest retail data points to an improvement in the market. In the third quarter, retail sales in mainland China rose 5.5 percent in September, compared with a 4.6 percent increase in August.

“The silver economy is expected to continue to be a growing force behind Singles’ Day,” says AlixPartner’s Singles’ Day report. “With the rise of China’s middle class, more affluent older shoppers are spending on premium products that improve their quality of life.”

Meanwhile, Jiangsu government official Shen pointed out that local consumers need to adapt to the current market situation. “After all, the economy has its own cycles and we have to live with them,” she said.

On Wednesday, Shen said she received a message from Estee Lauder that her premium membership would be downgraded at the end of this month because she had not purchased the brand’s products in some time. Undeterred, Shen said she was happy with her choice.

Additional reporting by Daniel Ren

Originally posted 2023-11-11 11:16:34.


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