Due to the prolonged economic downturn, Chinese retailers like Alibaba and JD.com had to extend their annual “Singles’ Day” (Double 11) promotion to up to five weeks.
According to Reuters, weak consumer spending has been a challenge for the Chinese economy this year. Factors such as the tough trade policies of US President Donald Trump, intense domestic competition, extreme weather conditions, and ongoing real estate crisis have left policymakers struggling to boost domestic demand.
Alibaba announced at a press conference in Shanghai on Thursday that they will be injecting “unprecedented” funds into this year’s largest sales event, including offering a 50 billion yuan (7 billion USD) subsidy for their top-tier consumers, the 88VIP members.
The company’s promotional activities started on Wednesday evening and will run until November 11th, the original Singles’ Day. In addition to subsidies and coupons, instant retail (online ordering with delivery within an hour) is a key focus this year. Seeing faster growth in instant retail compared to overall e-commerce, Alibaba and JD.com are investing billions of dollars in subsidies to attract consumers to use rapid delivery channels.
JD.com kicked off its promotions on October 9th, coinciding with the end of China’s eight-day-long National Day holiday and ByteDance’s TikTok sister app, Douyin, also commenced its promotion on the same day.
However, despite an increase in tourist numbers during the National Day holiday, consumer spending hit a three-year low, signaling concerning prospects for the Singles’ Day promotions. This also suggests that even extending the promotion period may not be enough to convince consumers to increase their spending.
A 49-year-old Beijing meditation studio owner, Deng Lei, expressed, “It’s less exciting than ever. All I want is a comfy pair of sneakers, but I haven’t found any that I really like.”
To attract price-sensitive consumers, JD.com announced at a press conference on Tuesday that they will be offering over 100,000 “hot” items at their lowest prices of the year and selling 50,000 pieces of warm long underwear at 2 yuan (0.30 USD) each, including shipping.
Sales of popular home appliances, which were boosted last year by government subsidies, are expected to decline. Nomura Securities analysts predict a 20% drop in home appliance sales in the fourth quarter.
Jacob Cooke, the co-founder and CEO of WPIC Marketing + Technologies, mentioned the potential increase in demand from the release of new Apple smartphone models, stating, “Perhaps people won’t buy home appliances this year, but they will upgrade their phones.”