For this year’s Singles Day shopping festival, there will be more first-time shoppers from lower-tier cities than from first and second-tier cities, according to a report published Wednesday by management consulting firm Bain & Company.

Why it matters: The change highlights a symbolic shift for e-commerce growth in tier-three cities and below, cities often projected as the new growth engine for e-commerce in China.

READ MORE: Singles Day 2020—bigger, longer, and more live

Details: Chinese consumers remain passionate about the annual fall event, China’s largest online shopping festival. Started as a one-day event by e-commerce giant Alibaba thirteen years ago on Nov. 11, it has grown to a month-long shopping spree with participation by scores of platforms. Overall, 95% of the 3,000 netizens who joined the survey hoped to make purchases, according to the Bain report.  

  • About half of those surveyed said they plan to spend more than last year; only 8% plan to reduce the spending. The average expected expenditure per customer was RMB 2,104 ($329). Female buyers are expected to spend more than males.
  • China’s e-commerce market remains fragmented, with more than 50% of the consumers intending to shop on at least three platforms, the report shows.
  • “Retail in China is approaching a point where there can be no growth strategy without a loyalty strategy,” said James Yang, a co-author of the report. 
  • Over the past decade, Chinese customers grew used to deep discounts and aggressive competition between platforms as both platforms and brands focused on getting large GMV (Gross Merchandise Value) figures. Platforms are placing less emphasis on GMV these days. 
  • The report points out that retailers and platforms are paying more attention to new benchmarks, like customer lifetime value and consumer retention; these measures can help them to win “during a broader spread of events across the year,” the report said.
  • E-commerce giants like Alibaba and JD are already cultivating loyalty with membership programs offering more values, better customer support, and faster deliveries.

Context: The first platform to launch Singles Day this year, Alibaba began events on Oct. 20, emphasizing sustainability and inclusiveness. 

  • Alibaba’s Taobao online marketplace crashed and stayed down for 17 minutes on opening day due to a traffic spike generated by a sudden inflow of “over enthusiastic” customers, the company explained in a Weibo post.
  • Top KOLs like Austin Li and Viya achieved total sales of RMB 18.9 billion during their livestreaming sessions on Oct. 20.
  • JD launched its month-long promotion for Singles Day on Oct. 17, by adding to its campaign a new on-demand delivery feature together with its grocery delivery affiliate Dada Nexus Group.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.