Commentary: What 11.11 Singles’ Day sales no longer say about China’s economy

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SINGAPORE: On Nov 12, 2020, amid the chaos of a contentious United States presidential election and a global pandemic, Jiang Fan, president of Alibaba’s Taobao and Tmall platforms, took the stage to announce the performance of its 11.11 “Singles’ Day” shopping festival.

The highlight was the total GMV (gross merchandise value) of 498.2 billion yuan (US$68.8 billion), a staggering 86 per cent increase compared to 2019. It was a moment of triumph for Chinese e-commerce – and the last time Alibaba launched the 11.11 with such fanfare.

Since 2022, major Chinese e-commerce platforms have replaced GMV announcements with vague metrics, such as the number of small merchants doubling their sales or brands with over 100 million yuan in sales.

For the recently concluded 2024 edition, Alibaba reported that 45 brands surpassed 1 billion yuan GMV on Tmall, while JD claimed a 20 per cent increase in the number of shoppers. Yet, both platforms again refrained from revealing total GMV.

Traditionally, 11.11, alongside the mid-year 6.18 shopping festival, has served as a key barometer for consumer confidence, which has become a focal point of China’s efforts to boost its slowing economy.

But in the absence of official figures, analysts and media are left to interpret third-party data. E-commerce data firm Syntun, a popular reference point, estimated that overall ecommerce sales grew 26.6 per cent to 1.44 trillion yuan this year.

HOW USEFUL IS THE BAROMETER?

This growth sounds promising on paper. During my visits to Hangzhou (home to Alibaba) and Yiwu (one of China’s largest e-commerce hubs) during 11.11, it was evident that e-commerce participants – from merchants to logistics operators – took the event seriously, striving to outdo competitors.

So, why the silence from platforms about total GMV? Several factors are at play.

First, there has been a shift in tone amid fierce competition. Before the pandemic, 11.11 was a celebration – a chest-thumping display of dominance by confident e-commerce giants. 

But the past few years have seen China’s e-commerce landscape morph from a duopoly (of Alibaba and JD) into a fierce battleground, with Pinduoduo, Douyin and Kuaishou now claiming 40 per cent of the market. Founders of both Alibaba and JD have returned to steer their companies amid this war of attrition.

In such a competitive and uncertain environment, public boasting feels out of place. Leaders lack the mood or energy for fanfare.

Moreover, in an economic climate where sentiment is fragile, the announcement of eye-popping numbers risks being misinterpreted – strong figures could invite criticism of profiteering or being out of touch, while weak ones might spark pessimistic headlines which the government dislikes.

Better to say as little as possible.

Then there is the question of the GMV’s relevance. The utility of 11.11 GMV as a measure of consumer confidence has become debatable. High return rates – reaching 80 to 90 per cent for fashion and jewellery sellers on live commerce channels – blur the real value of sales.

Moreover, the festival’s timeline now varies across platforms, with some stretching it to 35 days this year, making year-on-year comparisons complicated. Interestingly, this year, e-commerce platforms in the United States are also extending their Black Friday promotion period to be as long as two weeks. 

Pinduoduo’s strategy of offering low prices year-round has further diminished the allure of shopping festivals. When consumers can find bargains every day, what are the incentives for brands and consumers to invest extra time and attention for a singular event like 11.11?

Can category-level insights still provide some clarity? Perhaps, but even those numbers come with caveats. For instance, electronics emerged as one of the best-performing categories this year, but that is likely bolstered by the 150 billion yuan subsidies introduced in August to encourage appliance upgrades.

BACK TO BASICS

This year, it was quicker and easier to determine the US election results than to gauge the relative performance of China’s ecommerce platforms.

Ultimately, the value of 11.11 as a barometer for consumer confidence has diminished. The event’s headline figures often obscure more than they reveal.

Instead of focusing on inflated GMV figures, it’s more insightful to consider the fundamentals driving consumer behaviour. 

Confidence stems from secure job prospects, stable property values and a robust stock market – factors squarely within the government’s purview, not the platforms’.

There are glimpses of what renewed confidence could look like. For example, the surging stock market in late September prompted individuals across economic strata to splurge during the National Day Golden Week which started on Oct 1. I know quite a number of individuals who did exactly that.

Though the stock market rally was short-lived, it underscored the potential for decisive actions to revive consumer sentiment. While the government has unveiled new measures targeted at banks and local government, it has so far avoided direct stimulus for households.

As for ecommerce platforms, they must adjust to the new reality. Regardless of how much confidence returns, the explosive growth of the past two decades is unlikely to repeat. Instead, expect more Chinese platforms to look outward, competing on the global stage. Just take a look at Pinduoduo’s Temu and Taobao’s recent promotions in Singapore.

China’s 11.11 shopping festival has evolved from an extravagant spectacle into a quieter affair, reflecting both competitive pressures and broader economic uncertainty. For businesses and policymakers alike, the focus should shift from fleeting metrics to the structural factors that truly inspire consumer confidence: A belief that the future holds more promise than today.

Jianggan Li is CEO of Momentum Works, a Singapore-based venture outfit, and co-author of Seeing The Unseen: Behind Chinese Tech Giants’ Global Venturing.