China’s annual shopping extravaganza, Singles Day, is anticipated to witness restrained consumer spending this year, according to a survey conducted by Bain and Company. The survey, encompassing over 3,000 consumers in China, reveals that a majority of shoppers are inclined to curb their expenditures during the Singles Day festival, concluding on November 11.
Originally pioneered by Alibaba, Singles Day has evolved from a single-day shopping festivity to a multi-week period marked by shopping promotions across various online platforms in China. However, the allure appears to be diminishing, with almost half of this year’s surveyed consumers expressing a preference for cheaper brands or private label products. Private label items, often more economical than their branded counterparts, have gained traction in the current economic climate.
The survey indicates that 77% of respondents do not intend to increase their spending for this year’s festival, a marginal increase from the 76% reported last year and a notable surge from the 49% recorded in 2021. Economic deceleration and concerns about future income have cast a shadow on consumer spending in recent years.
James Yang, a partner at Bain, remarked in a phone interview that prevailing consumer sentiment remains somewhat subdued compared to pre-COVID levels. He highlighted heightened cost consciousness among consumers, influencing their decisions on where and how to allocate their funds.
In anticipation of the Singles Day festival this year, it is anticipated that there will be a heightened focus on stocking up on consumables. Last year, both Alibaba and JD.com refrained from disclosing Singles Day gross merchandise value (GMV) for the first time. However, Bain estimates that including other platforms, Singles Day e-commerce GMV experienced a 3% increase, reaching 934 billion yuan ($128.25 billion) in 2022. Factoring in an additional 181 billion yuan in livestreaming and content-led e-commerce, the total GMV surpassed 1 trillion yuan ($140 billion).
Livestreaming and content-sharing on social media have become instrumental in selling products in China, with platforms like Douyin (Chinese TikTok) gaining prominence. The shift towards livestreaming is expected to persist, with different consumer segments exhibiting varying spending behaviors. While individuals with higher incomes continue to spend, the blue-collar demographic is cutting back, and the middle class is adopting a more cautious approach to their purchasing decisions.