China Singles’ Day: do record sales really show a rebound in consumer spending?

Chinese consumers may have spent a record amount during the annual Singles’ Day shopping extravaganza early in November, but experts are split over whether it shows an acceleration in consumer spending following the coronavirus pandemic or simply savvy shoppers taking advantage of cutthroat deals.

Touted as the world’s biggest online shopping spree, Chinese splurged 769.7 billion yuan (US$117.2 billion) this year on everything from jewellery to houses, in what some say is evidence of a strong outlook for consumption in the world’s second biggest economy.

“The significance of Singles’ Day this year goes far beyond the sales figures themselves. The event has not only demonstrated the strong potential for Chinese domestic demand, but is also an important fulcrum for internal circulation in the Chinese economy,” Lin Huanyu and Chen Li, analysts from Huatai Securities, said last week, referring to Beijing’s strategy of focusing on domestic demand for future economic growth.

But other economists are less sure, arguing last week’s eye-watering headline figure represented only a modest rebound in overall consumption, as the shopping bonanza simply concentrated sales, rather than created new demand.

“The additional stimulus from Singles’ Day on annual gross merchandise volume has weakened, it is now essentially just concentrating consumer spending from the end of the year to the Singles’ Day sales period,” said Wu Jincao, an analyst at Soochow Securities, on Sunday.