China’s Singles Day shopping party halted amid tech crackdown

HONG KONG – China’s biggest online shopping day, known as ‘Singles Day’ on November 11, takes a muted tone this year as regulators crack down on the tech industry and President Xi Jinping does pressure for “common prosperity”.

The Singles Day Shopping Festival, also known as Double 11, is a major event for Chinese e-commerce companies. Last year, consumers spent $ 74 billion on Alibaba’s online shopping platforms during the 11-day festival. Smaller rival JD.com reported $ 40 billion in sales over a similar period.

Alibaba, China’s largest e-commerce company, usually hosts a big gala the day before November 11. Past galas have featured superstars such as Katy Perry and Taylor Swift and even acrobatic acts from Cirque du Soleil.

A glitzy live counter starts ticking at midnight to track how much consumers have spent on Alibaba platforms like Taobao and Tmall in real time. The festival is considered a barometer of consumption in the most populous country in the world.

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This year, Alibaba has toned down the hype. The Singles Day online gala on Thursday will be broadcast live due to the COVID-19 outbreaks in parts of China. Alibaba says it focuses on sustainability, support for charities and inclusiveness – themes that align with Beijing’s climate goals and Xi’s calls for “common prosperity” that aims to reduce inequality and excessive consumption.

“This year’s muted festivities are a perfect storm of economic, competitive and regulatory pressures,” said Michael Norris, director of research strategy at AgencyChina, a Shanghai-based consulting firm.

“In terms of regulation, e-commerce platforms are wondering how to align consumer extravagance with the themes of ‘common prosperity’,” he said.

Earlier this year, e-commerce platform Pinduoduo pledged to pay farmers $ 1.5 billion in profits to increase their incomes, while Alibaba pledged $ 15.5 billion. subsidies for small and medium-sized enterprises; and support workers in the odd-job economy, such as delivery drivers. , according to local media Zhejiang News.

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This year, Alibaba has also placed emphasis on sustainability, setting up packaging recycling points and partnering with brands to develop more environmentally friendly packaging. Customers can donate a portion of the profits from their purchases to a charity or project of their choice.

The shift to a focus on sustainability comes after Alibaba was fined a record $ 2.8 billion for breaking antitrust rules. The government has stepped up scrutiny of the tech sector and has worked to tackle monopoly practices that undermine consumer rights.

This year’s Singles Day sales squeeze may also reflect weaker consumer demand and shortages of some products due to material and energy shortages, as well as difficulties in getting products through channels. booming shipping and delivery.

“Traders have had a sluggish year so far, due to weak growth in retail and declining consumer confidence,” Norris said. “To add insult to injury, rationing of electricity at manufacturing centers has meant that many traders have lowered their expectations – even if there is an explosion in demand, they cannot necessarily there. to respond.”

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Jacob Cooke, CEO of WPIC, a marketing company that helps Western businesses sell online in China, said ultra-large discounts will be less common than in past Singles Day sales.

“We’re going to see strategies like limited edition giveaways become more prevalent than merchants who sell (items) at a 90% discount. . . due to a lack of inventory, a lack of supply, ”he said.

Meanwhile, popular short video platforms such as Kuaishou and Douyin de Bytedance, which have turned to e-commerce, are giving a hard time to traditional e-commerce platforms like Alibaba and JD.com.

Live streamers on video platforms can sell directly to buyers through their streams. Last year, Douyin reported 2 billion yuan ($ 313 million) in transactions on November 11 alone.

“In terms of commerce (of short videos), it’s going to be huge because that’s where all the eyeballs are,” said Cooke of WPIC.

The Singles Day festival is halving the sales of live broadcast hosts like Yang Guang, who sells everything from clothes to household appliances on live broadcasts, he said.

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But he said the lengthy festivities and complicated discount programs can be frustrating for buyers and sellers.

“As live streamers, we have to come up with different strategies to make it fun with every broadcast to keep customers interested,” he said.

AP video producers Olivia Zhang and Caroline Chen in Beijing contributed to this report.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.


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