Alibaba’s Singles’ Day shopping bonanza loses lustre amid China’s Big Tech crackdown, competition from live streaming
- China’s tech and antitrust crackdowns have added pressure on e-commerce platforms as the world’s biggest shopping festival faces declining popularity
- Live-streaming e-commerce has emerged as a popular alternative for deals, boosting the year-round popularity of ByteDance’s Douyin and Kuaishou
“I set alerts and stayed up late until midnight in previous years to pay for my orders so that I could get extra presents for being the first batch to pay,” the 39-year-old said, attributing the behaviour to being “crazy” in the past.
That craziness has subsided, according to Ding, who says she feels less passionate about the world’s largest shopping spree these days. Her budget for the annual event is now about 2,000 yuan (US$312), a quarter of what she used to spend.
“There are so many options now and I found products are not necessarily the cheapest during Singles’ Day,” said Ding, who works at a secondary school in Enshi, in China’s central Hubei province. “Sometimes you can find real bargains via live streaming, even during normal days.”
“Five, six years ago, it was still a two-horse race with Alibaba and JD.com. And now with Pinduoduo and all those social commerce platforms and live-streaming platforms coming in, there’s intense competition for a share of [consumers’] wallets,” said James Yang, partner at consulting firm Bain & Company’s consumer products, retail and strategy practices division.
Over 50 per cent 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.
“I never thought I really took advantage of Singles’ Day,” said 25-year-old Lucy Liu, who lives in Shanghai. “All I can do is to clip coupons through price-break discounts.”
Price-break discounts, a common promotional tool during Singles’ Day, offer consumers immediate discounts on orders above a certain amount. Merchants now tend to give more gifts rather than discounts, which typically means consumers spend more for more products.
Liu said she has found complex Singles’ Day deals troublesome, as good sales have become more common elsewhere. “There are discounts even if it’s not [Singles’ Day]. For example, I can buy make-up and skincare products at a nice price from daigou,” she said, referring to buying products imported from overseas.
Singles’ Day also faces new challenges this year. It is the first one since Alibaba was hit with an antitrust probe at the end of last year, and the world’s second largest economy is seeing weakened demand amid a zero-tolerance approach towards Covid-19, which has hit incomes and household spending.
China’s economic growth in the third quarter slowed to 4.9 per cent, while retail sales, a barometer of consumer spending, rose just 4.4 per cent from a year ago in September, according to China’s statistics bureau.
Beijing’s antitrust crackdown, which has targeted several Big Tech companies, has also forced a shift in business practices. A ban on monopolistic practices such as forced exclusivity – a once-popular tactic used to lock merchants into one platform – has made competition more fierce this year.
“Connectivity and openness is key to ensuring the best shopping experience,” Chris Tung, chief marketing officer of Alibaba, said during a media conference on October 27. “We’re truly seeing the benefits of these collaborations and openness and are excited to continue to move forward and achieve more of these in the future.”
Beijing is also considering asking companies such as Tencent and ByteDance to let competing platforms access and display their content in search results, according to a report from Bloomberg late last month, citing anonymous sources.
These moves are affecting hundreds of thousands of stores like InstaHot, an online clothing store with 765,000 followers and a monthly turnover of 2 million yuan on Taobao.
“The impact [of interoperability] is really huge,” said Tang, the head of InstaHot’s Taobao store, who asked to be identified only by his surname. “Many intermediate steps could be cut. Fewer clicks and increased convenience will definitely improve the conversation rates.”
Tang added that the ban on platform exclusivity did not affect small and medium-sized enterprises like InstaHot very much because it was common to choose a different name for different sites. That would be a more difficult choice for established brands, he said.
Tearing down the walled gardens “will definitely have a direct impact on the competitive landscape of Singles’ Day,” said Zhao Xiaofeng, an assistant professor at Lingnan University’s department of finance and insurance. “Big Tech companies should think about whether the advantages they had before due to their closed ecosystems are core competencies for them.”
“The operating efficiency of merchants will significantly improve after the opening up,” Zhao said. “Small and medium-sized enterprises will have more autonomy [in marketing] and depend less on the big platforms, which might inspire the emergence of new companies and new brands.”
Amid these regulatory headwinds, Alibaba’s shopping extravaganza is relatively low key compared with past years.
Alibaba has long used Singles’ Day to showcase its sales and marketing prowess. It has typically been accompanied by elaborate countdown galas in the hours ahead of November 11, with international superstars like Taylor Swift and Katy Perry making appearances. It would then broadcast the eye-popping sales figures on a giant screen at the end of the marathon event.
This year, in contrast, the Hangzhou-based tech giant has highlighted a slew of initiatives in line with Beijing’s increasing focus on environmental sustainability and social equality.
Alibaba has several initiatives tying into these goals.
Tmall is issuing 100 million yuan worth of “green vouchers” to encourage purchasing decisions that “contribute to an environmentally friendly lifestyle”, while Alibaba’s logistics arm Cainiao Network started opening recycling stations for packaging materials at 10,000 distribution stations across 20 cities this month.
To help elderly users, Taobao introduced a “senior mode” meant to make the app easier to navigate for older users, with modifications like larger text and buttons.
The platform is also allowing sellers to donate a portion of their sales to efforts supporting senior citizens living alone, “left-behind children” in rural areas and low-income workers, and will make a 1 yuan donation for every social media post mentioning “Goods for Good” purchases.
“In the early stage of Double 11, we focused on growth, the same way that parents would focus on a child’s height and strength,” said Alibaba’s Tung. “But as a child becomes a teenager, the parents shift their focus to nurturing the child’s sense of responsibility and the role he or she plays in society. And that is what we are doing now.”
Despite dampened enthusiasm for Singles’ Day, however, there are still signs of growth.
During the first wave of Singles’ Day presales this year, from October 20 to 31, Tmall’s gross merchandise value grew more than 50 per cent year on year to surpass 80 billion yuan, according to an estimate from research firm Yipitdata.
Apparel saw the biggest increase, more than doubling last year’s October presales, followed by home decor. Electronics, sports and outdoors, and health care lagged behind, according to the data provider.
Amid pandemic, Chinese consumers spend US$74.1 billion during Singles’ Day online sales festival
Taobao Live also saw sales increase 88.8 per cent year on year during the first sales window from November 1 to 3, Alibaba said.
Kuaishou runs its own 116 shopping festival from October 20 to November 11, with most sales happening on November 6. The short video platform operator said its live-streaming rooms received 2.3 billion views and 15 million likes from October 20 to 31.
Smaller sellers are continuing their hectic pursuit of sales, as well.
Li, known for his ability to sell massive amounts in short periods of time, sold 106 million yuan worth of products on October 20, the day Singles’ Day presales started.
From her home in Taizhou, in eastern Zhejiang province, Wang Yanqing watched Li’s show that day until midnight. “I wasn’t planning to buy [face] powder at all, then I heard him saying, ‘Buy one, get one free. You guys may not be able to get a spot.’ Then my desire to win went up,” she said.
Wang did not even want two packs, she said, so she sold the extra one for 180 yuan, having paid 350 yuan for both, to another woman after posting it on the microblogging platform Weibo.
“Indeed, many people didn’t get it,” she said. “There were a lot of people asking when I tried to sell the extra one.”