Why China wants to tone down its biggest online shopping day
| Hong Kong
China鈥檚 biggest online shopping day, known as 鈥淪ingles鈥� Day鈥� on Nov. 11, is taking on a muted tone this year as regulators crack down on the technology industry and President Xi Jinping pushes for 鈥渃ommon prosperity.鈥�
The Singles鈥� Day shopping festival 鈥� also known as Double 11 鈥� is a day for single people to treat themselves to gifts and celebrate their independence. It is a massive event for China鈥檚 e-commerce companies. Last year, consumers spent $74 billion on Alibaba鈥檚 online shopping platforms over the 11 days of the festival. Smaller rival JD.com reported $40 billion in sales during a similar time frame.
Alibaba 鈥� China鈥檚 largest e-commerce firm 鈥� usually holds a massive gala the night before Nov. 11. Past galas have featured superstars such as Katy Perry and Taylor Swift and even acrobatic acts by the Cirque du Soleil.
A glitzy live counter starts ticking at midnight to tally in real time how much consumers have spent on Alibaba platforms like Taobao and Tmall. The festival is viewed as a barometer of consumption in the world鈥檚 most populous country.
This year, Alibaba has toned down the hype. The Singles鈥� Day online gala Thursday will be live-streamed due to COVID-19 outbreaks in parts of China. Alibaba says it is focusing on sustainability, supporting charities, and inclusivity 鈥� themes that align with Beijing鈥檚 climate goals and Mr. Xi鈥檚 calls for 鈥渃ommon prosperity鈥� that aims to curb inequality and excessive consumption.
鈥淭his year鈥檚 muted festivities are a perfect storm of economic, competitive, and regulatory pressures,鈥� said Michael Norris, research strategy manager at Shanghai-based consultancy AgencyChina.
鈥淚n terms of regulation, e-commerce platforms are coming to grips with how to align consumption extravaganzas with 鈥榗ommon prosperity鈥� themes,鈥� he said.
Earlier this year, e-commerce platform Pinduoduo pledged to give $1.5 billion in profits to farmers to boost their incomes, while Alibaba has committed $15.5 billion to subsidies for small and medium-sized enterprises and supporting workers in the gig economy, such as delivery drivers, according to local news outlet Zhejiang News.
This year, Alibaba has also spotlighted sustainability, setting up packaging recycling points and partnering with brands to develop more eco-friendly packaging. Customers can donate a portion of the profit from their purchases to a charity organization or project of their choice.
The shift to emphasizing sustainability comes after Alibaba was fined a record $2.8 billion for violating antitrust rules. The government has been stepping up scrutiny of the technology sector and moving to curb monopolistic practices that hurt consumers鈥� rights.
The squeeze on this year鈥檚 Singles鈥� Day sales may also reflect weaker consumer demand and shortages of some products due to shortfalls in materials and energy, as well as difficulties in moving products through snarled shipping and delivery channels.
鈥淢erchants have had a soft year so far, due to weak retail growth and decreasing consumer confidence,鈥� Mr. Norris said. 鈥淭o add insult to injury, power rationing in manufacturing hubs has meant many merchants have dialed back their expectations 鈥� even if there is a burst of demand, they can鈥檛 necessarily meet it.鈥�
Jacob Cooke, CEO of WPIC, a marketing firm that helps Western companies sell online in China, says ultra-deep discounts will be less commonplace than in past Singles鈥� Day sales.
鈥淲e鈥檙e going to see strategies like limited edition gifts being more prevalent as opposed to merchants dumping [items] at a 90% discount ... due to a lack of inventory, a lack of supply,鈥� he said.
Meanwhile, popular short-video platforms such as Kuaishou and Bytedance鈥檚 Douyin, which have veered into e-commerce, are giving traditional e-commerce platforms like Alibaba and JD.com a run for their money.
Live-streamers on the video platforms can sell directly to shoppers through their streams. Last year, Douyin reported 2 billion yuan ($313 million) worth of transactions just on Nov. 11.
鈥淚n terms of [short-video] commerce, it鈥檚 going to be huge because that鈥檚 where all the eyeballs are,鈥� WPIC鈥檚 Mr. Cooke said.
The Singles Day festival boosts sales of live-streaming hosts like Yang Guang, who hawks everything from clothing to home appliances on live-streams, by half, he said.
But he said prolonged festivities and complicated discount schemes can be frustrating for both shoppers and sellers.
鈥淎s live-streamers, we have to think up different strategies to make it fun during every stream to keep customers interested,鈥� he said.
This story was reported by The Associated Press.聽AP video producers Olivia Zhang and Caroline Chen in Beijing contributed to this report.
