Alibaba Group Holding will again kick-start its annual Singles’ Day promotion via a lengthy presales campaign in late October, weeks ahead of the November 11 event, as the e-commerce giant contends with China’s flagging economy and disruptions from Covid-19 control measures across the country.
The Hangzhou-based company will commence presales activity from 8pm on October 24, according to multiple Chinese media reports. Alibaba, owner of the South China Morning Post, confirmed the published information on Thursday.
During presales, consumers are expected to initially pay a deposit for goods to secure a low price. Payments are to be completed during the two-part checkout period from 8pm on October 31 and on November 10 at the same time.
Singles’ Day, known as the world’s largest online shopping festival, is seen by many investors as a proxy for consumer spending in China as well as an important barometer of the country’s economic health. Alibaba branded it as an annual extravaganza in 2009, offering discounts of at least 50 per cent from its Chinese online retail platforms and free nationwide shipping.
Expectations for this year’s “11.11” event are not as buoyant as previous years, reflecting the state of China’s slowing economy, the disruptions caused by lockdowns and Beijing’s zero-Covid-19 policy, and the impact of regulatory crackdowns on the e-commerce industry.
It is better to “lower expectations” this year, according to Zhang Yi, chief executive at iiMedia Research.
“Consumption is very much related to the economy,” Zhang said. “If you look at this year’s GDP data and the recent resurgence of Covid-19 cases, I think consumption will be affected [by macroeconomic conditions].”
Growth forecasts for China this year have been slashed by global investment banks, as the economy struggles to shake off a number of issues, including new coronavirus outbreaks. Gross domestic product growth estimates for the country range between 2.8 and 3.3 per cent, according to updates published in mid-August.
Apart from Alibaba, other major domestic e-commerce services providers such as JD.com and Pinduoduo have extended their Singles’ Day sales campaigns to maximise marketing activities across the country. These firms have started holding these promotions from the end of October to the middle of November.
The e-commerce industry, however, faces increased uncertainty ahead of its premier event. Retail sales rose by 2.7 per cent in July, well below an expected rise of 5.3 per cent and down from 3.1 per cent growth in June, even as Beijing rolled out economic stimulus measures in the second quarter.
Singles’ Day may remain popular, but the hedonistic self-indulgence that helped drive this shopping festival’s popularity has been replaced by the sober reality that China’s economy is still navigating a path out of the pandemic.
Despite raking in 540.3 billion yuan (US$84.4 billion) in gross merchandise value to beat the turnover in 2020, Alibaba’s Singles’ Day sales last year grew at their slowest rate since the company’s first campaign in 2009.
Alibaba reported flat revenue growth during the June quarter amid macroeconomic headwinds and a slowdown in domestic consumption.
Main rival JD.com reported a 5.4 per cent increase in second-quarter sales, the slowest since the company went public in 2014. Pinduoduo, meanwhile, posted strong revenue and profit in the same period on the back of robust demand for budget goods from cost-conscious consumers