More than a decade later, Singles’ Day is no longer just a novel way to drive sales. It has evolved into a multibillion-dollar event closely watched as a bellwether for trends in Chinese consumer spending.

This year, with the coronavirus pandemic hurting many businesses and dragging down global economic growth, the stakes are much higher for the retailers. The spotlight will be on three trends: shoppertainment, gamification, and the role of value shoppers in driving sales.

What you need to know about China’s Singles’ Day online shopping festival

Shoppertainment

Content-driven social e-commerce has developed rapidly in China in recent years, with online platforms evolving from simple distribution of digital coupons to formats like video and live streaming to increase customer stickiness.

“Content is the key battlefield for platforms to create a better experience, with the goal of having a deeper shared wallet and a better relationship,” said Jonathan Cheng, head of Bain & Co’s Greater China Retail practice.

Amid an e-commerce boom driven by the coronavirus pandemic, this year’s Singles’ Day is expected to attract over 800 million Chinese consumers. Live-streaming will take centre stage on the big e-commerce platforms such as Taobao and Tmall operated by Alibaba, as well on the country’s second largest platform JD.com which has teamed up with short video platform Kuaishou to present a 200-hour, uninterrupted live streaming show from November 1 to 9.

Top influencers such as Li Jiaqi and Viya Huang will make appearances, while more than 400 company executives and 300 celebrities are planning individual live-streaming sessions on Taobao Live, Alibaba’s live streaming platform for merchants, promoting products from cosmetics and electronics to cars and houses.

Social e-commerce site Pinduoduo, the third-largest Chinese e-commerce player, is partnering with Hunan TV, one of the country’s biggest broadcasters, to give away 1 billion yuan (US$151 million) in red packets as part of the station’s annual Singles’ Day Gala that kicks off Tuesday.

Singles’ Day: e-commerce merchants create buzz, ring up sales with richer content

“Content makes the shopping experience richer. It is something that’s been happening for almost five years in China and I don’t think it’s going to slow down,” said Jordan Berke, founder and chief executive of Tomorrow Retail Consulting.

Gamification

E-commerce platforms are increasingly using mini games to make shopping festivals a more engaging experience as they compete with a plethora of other types of online entertainment for consumer attention.

JD.com offers a game where shoppers can open their own virtual (and pretend) shops in various Chinese cities while Alibaba launched a game where users raise and dress up virtual cats, which reportedly drew hundreds of millions of players. The games reward players with shopping coupons as they reach higher levels of play, creating an addictive social gaming experience that has some people hooked for hours every day. They also help merchants generate more sales by exposing consumers to more shops and deals that they might otherwise miss.

However, the sharing nature of these mini games – where users invite friends to team up and play – have led to complaints about too much spamming on social media, and the increasingly complex rules of Singles’ Day deals have had some people complaining that the small amount of money they save is not worth their time and energy. Yet that has not stopped millions of Chinese coming back for more.

Value shoppers

While some shoppers plan to celebrate the first Singles’ Day since the coronavirus pandemic with “revenge spending” on big-ticket luxury products, a large number will do the opposite by seeking cheaper items to prepare for the uncertainty ahead.

Recognising this need, Taobao, JD.com and Pinduoduo have targeted price-sensitive consumers with discounts based on the consumer-to-manufacturer (C2M) model.

In March Taobao launched a discount e-commerce app called Taobao Deals which offers straight-from-the-factory products at prices starting from 1 yuan (US$0.15). Within six months, it had more than 70 million bargain-hunting monthly active users (MAUs). JD.com and Pinduoduo doubled down on their focus on shoppers from China’s lower-tier regions by offering cheaper products from China’s smaller factories.

Analysts say the strategy is a win-win for all parties: the consumers, manufacturers, e-commerce platforms, and even the Chinese government, which has adopted a strategy of boosting domestic commerce in the post pandemic economy. Connecting factories directly to consumers cuts out intermediaries and lowers costs, which are reflected in the prices that appeal to “revenge saving” consumers who care more about discounts than brands.

Chinese factories that traditionally produce orders for export – a market impacted by Covid-19 – can now connect more with domestic consumers via the e-commerce platforms.

It also reflects the shift from saturated big cities to rural areas as the next driver of e-commerce growth.

“Premium consumers in China’s top-tier cities have been the focus for e-commerce giants for a long time, but there comes a point when the penetration in these markets is so deep that there’s little room for growth,” said Chen Tao, an analyst at Beijing-based consultancy Analysys.

Put together, shoppertainment, gamification, and lower prices direct from the factory just might convince consumers to delay chopping their hands off. All eyes will be on Chinese consumers to see if Singles’ Day bodes well for the Chinese economy.