On Monday, Chinese online retailers kicked off the annual November 11 Singles Day shopping festival. The festival, originated by e-commerce giant Alibaba in 2009, has long been a major retail event across the industry. This year, amid a slowing economy, weakening consumer demand, and growing competition from short-video platforms, established retailers are shifting their focus away from chasing high growth in gross merchandise volume (GMV).
For this year’s Singles Day festival, new e-commerce giants Douyin, Kuaishou, and Pinduoduo are increasing their rivalry with stalwarts Alibaba and JD. The crowded market has given merchants and consumers more choices, while the latter is more concerned about better deals in a year when budgets might be tight. Chinese livestream hosts are also diversifying their appearances as platforms cultivate new stars following the fallout from scandals affecting several top hosts. Moreover, Chinese tech giants are keeping a lower-than-usual profile as they continue to navigate pressure from both China’s tech crackdown and the capital markets.
Deep discounts amid a competitive market
As China’s largest e-commerce shopping festival, Singles Day is popular with consumers because of its perceived discounts. The major platforms continue to offer straightforward price cuts and faster home-delivery services this year, with the most obvious being that they’re offering the deepest discounts.
“It’s worth for platforms to offer discounts be up as high as possible as Singles Day is always a big headline event for them over massive GMV figures,” said Jacob Cooke, co-founder and CEO of e-commerce and technology consultancy WPIC.
Among some of the main developments for this year’s Singles Day:
- Alibaba buyers get an RMB 50 ($6.8) discount for every RMB 300 spent across its stores, the deepest discount in recent years, compared to an RMB 30 discount for every RMB 200 spent last year.
- JD has launched a promotion on all categories with customers able to get RMB 50 back for every RMB 299 spent.
- Douyin has launched a deposit pre-sale period this year, an initiative introduced by Alibaba in 2018, where buyers can pay a deposit to reserve products ahead of the event, with the transaction completed once the final payment is made on the day itself. Meanwhile, the platform is also offering RMB 30 off for every RMB 50 spent for the first time.
Douyin’s growing presence during Singles Day
While ByteDance’s Douyin is still dwarfed in terms of sales by e-commerce giant Alibaba, its fast growth has made it a notable rival. The platform only took three years to achieve a gross merchandise value of one trillion yuan, a figure which took Taobao 14 years to achieve, albeit in different economic circumstances.
Chinese consumers are increasingly shopping across platforms. In a Singles Day survey by consultancy Bain & Company, 69% of the 3,000 surveyed customers said they planned to shop across three or more platforms, up from 56% in 2021. Some 37% plan to use five or more platforms on this year’s event, the survey found.
Statistics from the e-commerce database Dianshubao showed two leading platforms — JD and Alibaba’s Tmall — accounted for 92.15% of the total GMV generated on Singles Day in 2021. But Cooke said Douyin could grab a significant market share this year. “The platform has proven over the last while that they have been gaining in certain big categories like fashion,” he added
This year, Douyin is targeting an annual GMV of RMB 1.7 trillion according to local media outlet 36Kr, an increase of RMB 1 trillion from 2021.
The TikTok sister app, which has nearly 700 million daily active users, initially drew “new traffic” to its e-commerce business mainly through merchandise from third-party platforms such as Taobao and JD. In October 2020, it stopped directing buyers to other platforms to complete their purchases and accelerated its e-commerce push through in-app features instead.
Douyin’s growing presence makes it more attractive for brands, and many are planning to invest more in their Douyin presence. Japanese clothing brand Uniqlo has turned to the platform to reach more consumers amid slowing demand in September, offering users a new, direct way to buy Uniqlo merchandise through the app.
Wenjing Liu, a managing partner at e-commerce marketing firm Genuine, said her clients have adjusted their sales strategies this year, hoping to use sales channels like Douyin to increase Singles Day revenue.
“This year, the split will be 70% to 75% on Tmall and 25% to 30% on Douyin, compared to last year when we had 5% to 10% on Douyin and 90% to 95% on Tmall,” she predicts.
Douyin also added shopping to ByteDance news aggregation app Jinri Toutiao ahead of this Singles Day, allowing users to shop within the widely popular news aggregator.
Top livestreamers return to Taobao
After disappearing for three months from June 3, livestream e-commerce superstar Li Jiaqi made a surprise return on Sept. 20. Li and another top livestreamer Viya together generated nearly RMB 20 billion in sales in 2021. This year has been challenging for top livestreamers — in addition to Li’s disappearance, Viya stopped livestreaming after being fined for tax evasion; another top e-commerce influencer, Cherie, also halted her popular livestreams in similar circumstances. They have yet to return.
An Alibaba employee told TechNode that Li Jiaqi’s return had helped bring back a sense of confidence to livestream e-commerce on its platforms and boosted the active stocking of beauty merchants. Li’s team has even created a new TV show to tell customers how they can bargain on prices with big brands.
In addition, more celebrities, influencers, and company executives are entering e-commerce livestream rooms and diversifying their appearances on multiple platforms.
Ahead of this Singles Day, Taobao poached former Douyin livestreamers including Luo Yonghao, Yu Minhong, and Hong Kong actress Cecilia Cheung. A source who is familiar with the matter previously told local media outlet China Star Market that Taobao had purposefully contacted MCN agencies of stars who have long had alliances with Douyin and Kuaishou ahead of this year’s Singles Day.
In response to why Douyin’s top livestreamers chose Taobao over Douyin, Chui Xue, president of Taobao and Tmall’s industry development and operation center, told Jiemian that it is the norm for merchants to run their businesses on multiple platforms.
The future of Singles Day
Last year, online retailers reported a gross merchandise value of RMB 540 billion, with Alibaba reporting 8.45% yearly growth, its slowest in nine years.
618, a mid-year shopping festival started by JD, is seen as an essential indicator for sales predictions for Singles Day. This year, the cumulative amount of orders placed on the platform increased by 10.3% to RMB 379.3 billion, the slowest growth rate since the e-commerce giant first disclosed data from the 618 events in 2017.
Two years ago, Chinese consumer spending recovered quickly from the first outbreak of Covid-19. However, it has taken a greater hit this year as pandemic control measures continue and the larger economy slows. In addition to weak demand and sluggish growth, Chinese tech giants have been treading carefully after Chinese policymakers tightened regulations on the sector. Last year, e-commerce giants have tacitly chose to downplay their GMV figures, intentionally keeping a low profile.
Such trends are continuing this year. Taobao has obscured the number of viewers on its livestreams for the first time, with more than 10 million people showing up as simply “10 million +”. Some users who hadn’t updated to the latest version of the app said they could still see more than 460 million people watching Li Jiaqi’s livestream return on Oct. 24, but those with the newest update merely saw “10 million +”. Li’s management company subsequently sent lawyer’s letters to a media outlet it saw as spreading “unverified” data after it reported enormous GMV figures for the sales event.
From Wenjing Liu’s perspective, Singles Day will still hold a big piece of the yearly revenue, but “other events, channels, and sales strategies are developing fast, and that is where the real growth potential for brands lies”.
While Cooke said Singles Day is still going to be the largest shopping festival day in the world “for a very long time,” adding that he’s never even seen a sense of “going down”.