China’s e-commerce giants fight for consumer eyeballs in world’s biggest shopping festival amid economic headwinds and fierce competition
- Singles’ Day is traditionally a time when Chinese consumers splurge on everything from smartphones to frying pans
- Analysts expect cutthroat price wars this year as competing platforms fight for attention and limited spare cash
Alibaba Group Holding, JD.com and Pinduoduo have kicked off the Singles’ Day sales season, still the world’s biggest shopping festival, as China’s top e-commerce players brave weak consumer spending, fierce competition and a fresh slump for the stock market on Monday.
Traditionally a time when Chinese consumers splurge on everything from smartphones and frying pans, to cosmetics and the latest fashions, this year’s festival is overshadowed by a slowing economy that has been battered by Covid-related lockdowns, supply chain disruption and slumping property and equity markets.
Singles’ Day was initially promoted by Alibaba in 2009 as an online shopping extravaganza aimed at catering to the shopping habits of people not in relationships, and has evolved into a wider barometer of China’s consumer spending power. Analysts expect cutthroat price wars this year as competing platforms fight for attention and limited spare cash.
Alibaba, which owns the South China Morning Post, started its shopping festival on Monday evening, with consumers encouraged to pay a deposit to secure the best prices and checkout slots. JD.com began presales for the festival four days ago with a variety of promotions while Pinduoduo, which delivered a strong set of financial results in the second quarter, kicked off its sales efforts with a series of deep discounts to woo consumers.
“There are many head winds blocking further growth this year, largely driven by low consumer confidence at the moment,” said Mark Tanner, managing director of Shanghai-based research firm China Skinny. “On the back of limited growth with the 618 [shopping event] and less razzmatazz surrounding this year’s festival, it would be fair to caution against expecting more than flat sales this year.”
Consumer sentiment took another dent though as new economy stocks plunged in Hong Kong on Monday, with Alibaba down 11.4 per cent to a record low of HK$61.65 while JD.com slumped 13.2 per cent to HK$141.8.