11-11 shopping festival shows China's economic power

Sales of Apple's products on JD surged 200 percent year-on-year in the first four hours of the gala, while the transaction volume of mobile phones including brands such as Xiaomi, Oppo, Vivo and Honor increased over 300 percent on a yearly basis in the first 10 minutes of the promotion, according to JD.

It is noteworthy that imported products gained traction among consumers during this year's shopping festival. In the first 10 minutes of the promotion, the transaction volume of JD Worldwide Import Supermarket was 39 times that of last year.

In addition, more young people tended to buy sports shoes and clothing of homegrown brands, and Anta, Qiaodan and Peak have become the most popular domestic sports brands, JD said.

Zhao Ping, deputy head of the Beijing-based Academy of China Council for the Promotion of International Trade, said this year's shopping festival has unleashed consumption potential, stimulated consumers' massive purchasing power and shored up the confidence of shoppers.

"E-commerce platforms were doubling down on the shopping carnival and introducing new products and new brands to lure consumers and satisfy their diversified demand," Zhao said.

Online marketplaces have become a significant channel for foreign merchants to invigorate their business and tap into the Chinese consumer market as COVID-19 has hindered transnational travel, she said, adding sales of imported products have witnessed explosive growth during the promotion gala.

"Shopping via livestreaming services is a fast-growing new business model, which could offer detailed and comprehensive information about products to consumers. In addition, buyers could interact with livestreamers in a timely way and receive more discounts and coupons," she said.

"Chinese consumers have become more conscious about price and quality after the COVID-19 pandemic. Livestreaming is a key channel for them to get a full download of product information before making shopping decisions, and we are also seeing a similar trend emerging in other countries, but China is leading," said Britton Russell, who leads the consumer and retail practice at AlixPartners in China.

The total transaction volume of China's e-commerce segment is expected to reach 46 trillion yuan by 2025, with online retail sales amounting to 17 trillion yuan, according to the e-commerce development plan for the 14th Five-Year Plan period (2021-25).

The plan was jointly issued by the Ministry of Commerce, the Cyberspace Administration of China and the National Development and Reform Commission last month.

The plan said e-commerce will become an important driving force for boosting the nation's economic power, technological prowess and comprehensive national strength by 2035.

According to data from the National Bureau of Statistics, national online retail sales reached 9.19 trillion yuan in the first three quarters of this year, expanding 18.5 percent year-on-year.

Consultancy Bain & Co said in a report released before 11-11 that overall sales revenue is expected to rise during this year's Singles Day shopping extravaganza, and the number of consumers from lower-tier cities who participate in the shopping gala for the first time might surpass that of first- and second-tier cities.

A COVID-19 pandemic-related surge in spending on wellness category is likely to continue this year, especially in cosmetics and personal care, the report said.

In addition, 95 percent of respondents said before the gala that they intended to take part in this year's shopping carnival. About 52 percent of interviewees said they planned to increase their spending and the average spending of each consumer was 2,104 yuan last year.

Women were more likely than men to be anticipating a bigger outlay during the shopping spree this year. Furthermore, more than 50 percent of surveyed consumers said they planned to shop on three or more platforms. The report is based on a survey of 3,000 Chinese consumers and done in conjunction with technology company Toluna.

"For many consumers, Singles Day discounts haven't fostered loyalty to a single platform; spoiled for choice, they prefer to shop around," said Jonathan Cheng, a Bain & Co partner who leads China retail practice.

"However, retailers that dig deeper are likely to find a subset of users that count as genuine fans. These customers can be the bedrock of renewed strategic differentiation. Our survey suggests that a retailer who captures and delights new customers on Singles Day tends to keep them as loyal customers throughout the year."

Kenny Yao, a director at AlixPartners Shanghai, said younger Chinese shoppers are gradually growing a sense of national pride, and the Gen Z, or people born between the mid-1990s and the early 2010s, are no longer seeking high-end foreign brand names purely for social status.

"They are looking for products that can truly represent their identity, meaning it is more challenging than ever to maintain brand loyalty among this group," Yao said.

With the transformation and upgrading of China's manufacturing industry and changes in consumption concept, the guochao－a trend representing the rise of homegrown brands that weave Chinese cultural elements into their design or branding－is gaining popularity among young Chinese consumers, said Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy.

Mo said the Singles Day shopping gala also provides an important opportunity for domestic brands to tap into the market, expand influence and boost their sales.