“The Singles Day Story”
Singles day began in 1993 at Nanjing University on 11/11 as an “anti-valentines” day-- a day for singles to celebrate their single status represented by the string of ones in the date itself. In 2009, Singles Day became a part of Alibaba’s huge marketing scheme to get Chinese consumers to spend more money--between the holidays of China’s Golden Week in October and the Christmas season-- as huge discounts across their shopping platforms/storefronts--Taobao, Alibaba.com, and Tmall--led to a national, and to some extent international, shopping holiday.
This past Singles Day has generated about $38 billion dollars in revenue to the e commerce giant Alibaba as other Chinese retail and ecommerce companies mimic Alibaba’s singles day discount strategy to drag in huge revenue amounts in just 24 hours. Such a big day for consumer spending is bound to have some consequences to the Chinese economy. To understand the impact and the story the Singles Day shopping phenomenon has on China overall amid its current political tensions is to understand the current economic landscape of China.
As of right now, the Chinese economy is slowing down as its previous and current growth has largely been driven by savings, investments, and exports. Such criteria for China’s economic fuel has led to a misleading facade that domestic consumption is shrinking in its ratio to the nations GDP. However, absolute spending has been on the rise, which may be due to the reforms proposed by Premier Wen Jiabao in 2013 as a way to increase middle class spending and urbanization through his pushing of reformation regarding the hukou household registration system. Such a current economic situation prompts the idea that the recent gains from Singles Day tells an important story regarding China’s potential economy type shift.
The burdens of a trade war with the United States, political turmoil in Hong Kong as democratic protests persist, and a slowing economy did not stop Alibaba, among other Chinese online retailers such as JD.com or Pinduoduo, to reach new peaks in revenue. This growth in sales and ability to dust off economic slowdown is largely due to the growing middle class and their increasing spending habits--which may be a result due to the previous Hukou reforms accelerated by Premier Wen Jiabao. Additionally, it comes as a surprise that consumers in lower-tier Chinese cities--examples being Guilin, Luoyang, and Sanya, have “showed a higher 'willingness to pay’ when compared with...more affluent cities”. This factor may be due to a Chinese consumer mentality that continually seeks upgrads in “quality of life and experience”(Zen).
The Singles Day phenomenon has also told a story in regards to how Chinese consumers perceive U.S. retail as trade tensions hold up and U.S. based retail shops increasingly support Hong-Kong’s independence movement. In a survey by Alix Parners, they stated that up to 78 percent of Chinese consumers would avoid buying American brands and boycott American goods due to the main reason of national loyalty. There has long been fear that Chinese consumers will begin to boycott U.S. based goods, but if Singles Day has proven anything, it has proved that Chinese consumers are still demanding US goods. For example, the United States “was the second country by GMV in terms of countries selling to China”(Kharpal).
Overall, the Single Day phenomenon in China is one that takes advantage of Chinese consumer spending confidence and utilizes this fact to turn China into an “investment destination for those looking to capitalize on consumer spending”(Kuepper). The last line of the story is simply this: China is hoping to shift from an export driven economy to an eventual service driven economy as e-commerce giants have adopted this idea of a Singles Day .
Sources:
https://graphics.wsj.com/alibaba/
https://www.vox.com/the-goods/2019/11/11/20959700/china-singles-day-2019-prime-day-black-friday
https://www.latimes.com/business/story/2019-11-11/china-singles-day-sales-booming
https://qz.com/1746291/alibabas-singles-day-tops-38-billion-amid-trade-tensions-protests/
https://www.dw.com/en/china-alibaba-singles-day-sales-on-course-for-new-record/a-51193837
https://www.cnbc.com/2019/11/11/alibaba-singles-day-2019-record-sales-on-biggest-shopping-day.html
https://www.thebalance.com/singles-day-and-china-consumer-power-4114410
https://www.nytimes.com/2019/11/01/business/alibaba-profit-results.html
https://finance.yahoo.com/news/alibaba-singles-day-2019-194228260.html
