11.11: Alibaba sales blitz set to hit record as Chinese get rid of Covid-19

For brands and retailers struggling to recover from months of closed shops and consumers squatting indoors, the lucrative Chinese shopper is a much needed bright spot. Many companies are “doubling” the number of their Singles Day sales events, Wang said.

A survey by market research firm Oliver Wyman found that 86 percent of Chinese consumers are willing to spend as much or more than they did on Singles Day last year.

Chinese buyers “continue to spend like crazy,” said Jacques Penhirin, partner of Oliver Wyman, who led the investigation.

The remaining 14% of survey respondents said they would spend less on Singles Day because the pandemic had brought too much uncertainty for them.

Penhirin predicted the event would be huge for participating brands and retailers, as shoppers use it as an opportunity to indulge themselves.

It has been a strange year for Chinese consumers. They saved money for an unprecedented lockdown earlier this year, but they are not traveling, Penhirin said.

Buyers therefore approach Singles Day with an indulgent mindset. For example, a buyer who typically buys Maybelline makeup, he said, might instead spend a bit more to buy Yves Saint Laurent products on sale.

“Now is the time to be indulgent,” Penhirin said.

Sparkling stars and successful growth

Singles Day regularly sees higher sales than Black Friday and Cyber ​​Monday combined.

The event – also known as Double 11 – is linked to the informal, anti-Valentine’s Day holiday in China, which celebrates people who are not in a relationship. It takes place on November 11, which date was chosen because it is written in four, or celibates.

Alibaba started offering discounts for Singles Day in 2009 and has since turned the event into an online shopping bargain.

The event also gained ground away from home China: Alibaba’s Lazada, a Southeast Asian subsidiary, offers Double 11 discounts in Singapore, Malaysia, Indonesia, Thailand and Vietnam.

In China, Alibaba once again staged a glitzy live concert counting the hours until the start of the main sales day. Celebrities often make appearances at the 11.11 gala, usually to sell their own brands and products.

Last year’s star performer was singer Taylor Swift. This year, it’s Katy Perry, who was virtually taken to a Shanghai arena on Tuesday night.

This year, the company added three more days of sales – which took place Nov. 1-3 – due to the pandemic, according to Alicia Yap, chief executive of Citigroup Global Markets Asia.

A few more days of huge discounts help “brands or merchants recoup lost sales during foreclosure and [helps] global brands have access to stronger demand from Chinese consumers, ”Yap wrote in a note last week.

Citigroup predicts that Alibaba’s Double 11 transport could grow 46 percent year-on-year to 393 billion yuan ($ 59.4 billion). Excluding the additional three days, Citi said sales could reach 24% to 333 billion yuan ($ 50.3 billion).

Analysts estimate JD’s sales for Singles Day could reach 276 billion yuan ($ 41.7 billion), up 35 percent from last year.

Trends for this unprecedented year

Live streaming is expected to be a “key growth engine” for this year’s Double 11, said Wang of Forrester.

Live streaming had been around in China for years, but really took off during the lockdown.

It’s like the Shopping Channel or QVC on steroids: shoppers tune in to watch influencers sell everything from cars to mangoes, and can get big discounts during live broadcasts.

Wang also expects luxury goods to sell very well, as the Chinese usually buy them when traveling abroad.

“When the pandemic makes international travel impossible, consumers will pivot these purchases nationally and especially online,” she said. “This is also why this is the first year that luxury brands have been heavily involved in Singles Day.”

Oliver Wyman has found that if foreign brands continue to dominate popular Singles Day categories such as cosmetics and infant formula, an increasing number of Chinese shoppers will buy local brands. of products like electronics and smartphones this year.

“It’s not patriotism… it’s just that the technology, design and quality are better, so there is just more trust” in Chinese brands, said Penhirin.

Another reason the Chinese are buying locally is that some remain cost conscious after the pandemic, analysts at consultancy Bain & Company say.

Jack Ma of Alibaba in disgrace with Beijing

Even though there are many other platforms and online stores participating in Singles Day, it is still closely linked with Alibaba. And recent criticism of the annual event by government groups and state media could indicate that Ma is still not in favor of Beijing.

The Chinese government has said it is keen to boost domestic consumption to boost the country’s economic growth. And yet, the China Consumers Association, a state-backed national consumer rights group, has called for “rational consumption” during the upcoming Double 11 shopping season, according to statements released last week.

Public news channel CCTV called for “less stuff” from shopping platforms during Singles Day shopping season, saying they shouldn’t mislead consumers.

But an argument between a tech billionaire and Beijing regulators is unlikely to affect the way Chinese consumers shop, according to Oliver Wyman’s Penhirin.

“Consumers don’t care, honestly,” he said, adding that while financial markets might pay attention to the drama, consumers will think “as long as I get a good deal it’s not my business. case”.

– Laura He contributed to this report.