Chinese consumers lose interest in ‘11.11 shopping festival’

Tram Ho

For six consecutive years, Ding Xiaojuan “cut off his hand” for the 11/11 Singles’ Day shopping festival. “Hands off” is a popular expression among Chinese consumers to describe their obsession with online shopping that goes out of control, to the point where they want to chop off their hands to stop.

“I’ve set an alert and stayed up until midnight in previous years to pay for my orders, just to be able to get extra gifts because it’s the first installment , the 39-year-old said. considers this past behavior “crazy”.

According to Ding, that enthusiasm has subsided, because she feels no longer passionate about the biggest shopping race of the year. Her budget for this year’s event is around 2,000 yuan (about $312), just a quarter of what she used to spend.

“There are so many options right now, and I don’t think the products are necessarily the cheapest on Singles’ Day,” said Ding, who works at a high school in Enshi, in central China’s Hubei province. know. “Sometimes you can find real bargains through livestream, even on normal days.”

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Alibaba’s Tmall promotes Singles’ Day shopping festival 2021 that begins on October 20.

Started in 2009 by the Chinese e-commerce giant Alibaba, Singles’ Day has evolved from a one-day festival on November 11 to a multi-billion dollar event that spans several years. week. It was then heavily promoted by major Chinese e-commerce sites, gaining attention and gradually turning into a focal point for domestic consumer spending.

After more than a decade, however, there are signs that Singles’ Day is losing some of its luster. There have been complaints in recent years about the increasingly overused discounting methods, which require shoppers to do complicated calculations or get lost. The emergence of more festivals and shopping platforms also gives consumers less reason to wait for Alibaba’s shopping event.

For example, live-streaming e-commerce has become popular on short video platforms such as Kuaishou and Douyin – China’s version of TikTok. Alibaba’s Taobao Live is also a big player in this area.

“Five, six years ago, it was still a two-horse race between Alibaba and And now with Pinduoduo and all the social commerce and live streaming platforms coming out, there will be competition. fierce competition for market share in consumers’ wallets , said James Yang, partner at consumer products, retail and strategy consulting at Bain & Company.

More than 50% of consumers surveyed by Bain & Company this year plan to use three or more platforms during Singles’ Day, according to a report published in October.

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Workers sort packages for delivery at the platform’s Yizhuang Smart Delivery Station in Beijing, November 11, 2020.

“I never thought I’d really take advantage of the Singles Day shopping festival,” said Lucy Liu, 25, who lives in Shanghai. “All I can do is get coupons through the sale.”

Sudden discounts, a popular Singles Day promotional tool, offer consumers an instant discount on orders over a certain quantity. Sellers now tend to offer more gifts than discounts, which often means consumers have to spend more on more products.

Liu said she finds shopping transactions during the 11/11 holiday season to be complicated and confusing. “There are sales even when it’s not Singles Day. For example, I can buy makeup and skincare products at great prices from Daigou,” she said of buying products imported from abroad. .

The Singles Day event also faced new challenges this year. This is the first event since Alibaba was subjected to an antitrust investigation late last year, and China’s economy is also seeing demand weaken as the Covid-19 pandemic has hit revenue. income and expenditure of households.

China’s economic growth slowed to 4.9 percent in the third quarter, while retail sales, a measure of consumer spending, grew only 4.4 percent year-on-year, according to the China Bureau of Statistics. last year in September, according to China’s statistics bureau.

New policies applied to some Big Tech companies have also forced them to change the way they do business. The ban on monopolistic activities has made competition even fiercer this year. Regulators also began to require internet platforms to break previous strict regulations that prevented companies’ ability to interact with their products.

WeChat, China’s largest social media platform with 1.25 billion monthly active users, has begun allowing linking with rival platforms in one-on-one chats, including those chat for Alibaba’s app, to comply with regulations.

Alibaba also now allows users to pay with WeChat Pay on some of its platforms, such as food delivery service, video streaming platform Youku, online ticketing platform Damai and platform Kaola cross-border e-commerce.

Alibaba also said bargain marketplace Taobao Deals, used e-commerce platform Idle Fish and grocery chain Freshippo are still waiting for Tencent’s approval to include WeChat Pay, Alibaba said on Thursday. end of September. The company did not mention the main e-commerce platforms Taobao and Tmall.

Beijing is also considering requiring companies like Tencent and ByteDance to allow competing platforms to access and show their content in search results, according to a report from Bloomberg late last month, citing a report from Bloomberg. anonymous sources.

The moves are also affecting InstaHot, an online clothing store with 765,000 followers and monthly sales of 2 million yuan on Taobao.

“The impact is really huge,” said Tang, head of InstaHot’s Taobao store. “Many middle steps can be cut. Fewer clicks and increased convenience will definitely improve chat rates.”

Tang added that the platform’s exclusivity ban doesn’t have much of an impact on SMEs like InstaHot. But that will be a tougher choice for established brands.

Zhao Xiaofeng, assistant professor at Lingnan University’s department of finance and insurance, said: “Big Tech companies should think about whether the advantages they had before due to their closed ecosystem Is it their core competence?”

According to Zhao, Tencent-backed social media e-commerce platform Pinduoduo could be the biggest loser from the recent changes, as its growth has been largely driven by its support. Tencent’s social media platforms. With Tencent’s opening, Alibaba and Douyin will benefit, he said.

“The performance of merchants will improve significantly after opening,” Zhao said. “SMEs will have more autonomy in marketing and less reliance on large platforms, which can inspire the emergence of new companies and new brands.”

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Alibaba shows off a total merchandise volume of 498.2 billion yuan during the Singles Day 2020 shopping festival, on November 12, 2020.

However, although enthusiasm for the Singles Day shopping festival has waned, there are still signs of growth in the e-commerce sector.

According to estimates from research firm Yipitdata, from October 20 to 31, Tmall’s total merchandise value increased by more than 50% year-on-year, surpassing 80 billion yuan. Apparel had the biggest increase, more than doubling in presale last October, followed by home decor. According to the data provider, electronics, sports and outdoor activities, and health care products lag behind.

Alibaba has long used Singles’ Day to showcase its sales and marketing prowess. It is often accompanied by elaborate countdown gala dinners in the hours leading up to 11/11, attended by international superstars such as Taylor Swift and Katy Perry. It will then broadcast compelling sales figures on a giant screen at the end of the countdown.

In contrast, this year, the Hangzhou-based tech giant launched a new set of initiatives focused on environmental sustainability and social equity.

For example, Tmall is issuing a “green voucher” worth 100 million yuan to incentivize purchase decisions that “contribute to an eco-friendly lifestyle”. Meanwhile, Alibaba’s logistics arm Cainiao Network began opening packaging material recycling stations in 10,000 distribution stations across 20 cities this month.

To help elderly users, Taobao has introduced a “premium mode” to make the app easier to navigate for older users, with modifications such as displaying larger text and buttons. The platform also allows sellers to donate a portion of their sales to efforts to support elderly people living alone, “abandoned children” in rural areas, and low-income workers. , and will donate 1 yuan for each social media post.

Refer to SCMP

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Source : Genk