Alibaba Group, China's largest e-commerce company, announced that it achieved year-on-year growth during this year's Singles' Day sales period, which ended at midnight on Saturday, while its competitor JD.com reported record sales volumes. At the same time, data provider Senton estimated that the total cumulative trade volume on major e-commerce platforms increased by 2.08% to 1.14 trillion yuan ($156.40 billion), compared to a growth rate of 2.9% last year.
Originally, the Singles' Day festival was a 24-hour online shopping event held on November 11 each year in China, before expanding into weeks of promotions across major e-commerce platforms in the country and retail stores. This year's sales growth expectations for the festival, seen as a measure of consumer confidence, were weak as the economy struggles to maintain the recovery achieved post-COVID-19 pandemic.
Last year, when China began to lift COVID-19 restrictions, Alibaba, the largest e-commerce company in the Asian giant by market share, did not disclose the value of its sales in yuan for the festival for the first time. Again this year, it only mentioned that sales from its e-commerce platforms Tmall and Taobao were positive.
*Discounts to Boost Sales*
Alibaba pressured merchants to significantly lower prices on Singles' Day this year. At the beginning of the festival in late October, it announced that it would offer 80 million products at the largest discount of the year. Analysts view this as an attempt to counter competitors like Douyin and Pinduoduo from PDD Holdings that have changed the e-commerce landscape in China over the past few years by selling lower-cost products at year-round discounts. As a result, discounts ranging between 40% and 50% have become more common than in previous years.
A report by Bain & Company released last week found that 77% of 3,000 consumers surveyed planned to spend less or the same amount on Singles' Day compared to last year. Many consulting firms expected cash sales growth through e-commerce platforms to return to double digits for the first time since the pandemic, but the final sales picture will take time to emerge. Cash sales figures take into account the value of all orders placed and do not include those that will be returned later.
Analysts and industry executives expect return rates to be high this year as consumers buy more to get greater discounts at checkout and then return items they do not need. Alibaba reported that bicycle sales surged by 300% during the first hour of sales.
