China's Singles' Day online shopping fest muted amid tech crackdown

HONG KONG – China’s biggest online shopping day, known as Singles’ Day on November 11th, is muted this year as regulators crack down on the tech industry and President Xi Jinping urges “common prosperity.”

Singles’ Day shopping festival – also known as Double 11 – is a huge event for China’s e-commerce company. Last year, consumers spent $ 74 billion on Alibaba’s online shopping platforms over the 11 days of the festival. Smaller rival JD.com reported $ 40 billion in revenue over a similar period.

Alibaba – China’s largest e-commerce company – usually hosts a huge gala the night before November 11th. Past galas featured superstars such as Katy Perry and Taylor Swift and even acrobatic acts from Cirque du Soleil.

A glittery live counter starts ticking at midnight to count in real time how much consumers have spent on Alibaba platforms like Taobao and Tmall. The festival is considered a consumption barometer in the most populous country in the world.

This year, Alibaba toned down the hype. Thursday’s Singles’ Day online gala will be broadcast live due to the Covid-19 outbreaks in parts of China. Alibaba says it is focusing on sustainability, charities and inclusivity – issues that align with Beijing’s climate goals and Xi’s calls for “shared prosperity,” which aims to curb inequality and over-consumption.

“This year’s muted celebrations are a perfect storm of economic, competitive and regulatory pressures,” said Michael Norris, research strategy manager at Shanghai-based consulting agency AgencyChina.

“In terms of regulation, e-commerce platforms are concerned with how to balance consumer extravagance with ‘common prosperity issues’,” he said.

Earlier this year, e-commerce platform Pinduoduo pledged to give farmers $ 1.5 billion in profit to increase their incomes, while Alibaba gave $ 15.5 billion in subsidies to small and medium-sized businesses and the Support for workers in the gig economy such as delivery drivers has pledged, according to local news agency Zhejiang News.

This year, Alibaba also put sustainability in the spotlight by setting up packaging recycling centers and working with brands to develop greener packaging. Customers can donate a portion of the profits from their purchases to a charity or project of their choice.

The shift towards sustainability comes after Alibaba was fined a record $ 2.8 billion for violating antitrust regulations. The government has tightened control of the technology sector and sought to curb monopoly practices that violate consumer rights.

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The pressure on this year’s Singles’ Day sales may also be due to weaker consumer demand and shortages of some products due to shortages of materials and energy, as well as difficulty getting products through tangled shipping and delivery channels.

“Merchants have had a bad year because of weak retail growth and falling consumer confidence,” said Norris. “To make the injury worse, power rationing in the manufacturing centers has resulted in many traders lowering their expectations – even if demand increases, they may not necessarily be able to meet them.”

Jacob Cooke, CEO of WPIC, a marketing firm helping western businesses sell online in China, says ultra-low discounts will be less common than on past Singles’ Day sales.

“We’ll see strategies like limited edition gifts happen more often than retailers selling (items) at a 90 percent discount. . . due to a lack of inventory, a lack of supply, ”he said.

A delivery driver in Beijing drives an electric vehicle full of parcels on Thursday.Jade Gao / AFP via Getty Images

Meanwhile, popular short video platforms like Bytedance’s Kuaishou and Douyin, who got into e-commerce, are ditching traditional e-commerce platforms like Alibaba and JD.com.

Live streamers on the video platforms can sell directly to buyers via their streams. Last year, on November 11th, Douyin reported transactions valued at 2 billion yuan ($ 313 million).

“As for the (short video) trade, it’s going to be huge because that’s where all the eyeballs are,” said WPIC’s Cooke.

Singles’ Day festival will halve the sales of live streaming presenters like Yang Guang, who streams everything from clothing to home appliances on live stream, he said.

However, he said that prolonged celebrations and complicated discount schemes can be frustrating for both buyers and sellers.

“As a live streamer, we have to come up with different strategies to make every stream fun to keep customers interested,” he said.

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