What does the future hold for shopping festivals like Singles Day?

Although China’s economy is facing exceptional challenges, 2023’s major ecommerce event – Singles Day – was a sales extravaganza across the region.

Where Singles Day came from

Thirty years ago, Singles Day was an opportunity for young single people to celebrate and socialise. Retailers soon recognised its potential and in 2009 Alibaba’s ‘Double 11’ started a trend that is now a shopping festival. Popularised by a combination of ecommerce, entertainment and purely indulgent shopping, it’s a ‘retailtainment’ phenomenon.

What can Singles Day 2023 tell us about Black Friday and Cyber Monday?

Annually, Singles Day sales in China alone are around half of those worldwide for Black Friday and Cyber Monday (BFCM).

Last year, Alibaba didn’t disclose Singles Day gross merchandise value (GMV). However, including other platforms, it’s estimated GMV in 2022 increased by almost 3% to CN¥934billion (US$128.25billion). Livestreaming and other content-led ecommerce might have added an additional CN¥181billion to sales.

These figures far exceed Adobe’s estimate of US$35.3billion US spending during Thanksgiving and BFCM for 2022, for example. Estimated global ecommerce sales for the period at US$281billion represented a 2% increase on 2021.

A recent survey found most shoppers planned to spend the same or less than 2022 during Singles Day 2023. Enthusiasm for the event was down by more than 20%. Hashtags trending on social media included ‘downgraded consumption’ and ‘if I don’t buy I can save 100%’. Shoppers were also suspicious about whether offers were genuine. In contrast, in a Statista survey, four out of 10 people said they planned to increase their spending on clothes and fashion items this year.

In fact, China’s largest online marketplaces, Alibaba and JD.com, reported continuing year-on-year growth this year. However, the rate was lower than last year at just over 2%. As economic uncertainty bites, will other intensive online shopping festivals like BFCM face boom or bust?

Amazon’s Prime Day in July 2023 reportedly generated US$12.7billion; growth of more than 6% compared with 2022. For Thanksgiving and BFCM Adobe forecasts US$37.2billion, driven by almost 6% increase on Black Friday and 5% Cyber Monday sales.

However, it won’t be plain sailing for online retailers according to Shopify. Consumers have been reducing their discretionary spending. Although buying the same or more during BFCM this year, they want high quality and will research the best deals. Eight out of 10 shoppers also plan to do some or all of their shopping in store.

Do customers want more than discounts?

Economic challenges might dampen shoppers’ enthusiasm for spending. Still, this year Alibaba, owners of giants Taobao and Tmall.com, offered 80million products at significantly reduced prices. Reportedly sellers were told to offer their best prices of the year for the period which started on 24 October.

However, shoppers are becoming more interested in lifestyle-related experiences and products rather than discounts. Favourite purchases are for pets, health and self-expression and include food supplements and sportswear. For example, Lululemon reported a 61% revenue increase in China to August, making it the brand’s fastest growing market. Arguably brands don’t need to offer major discounts to maintain this level of growth.

What can Singles Day 2023 tell us about Black Friday and Cyber Monday?
Online Shopping Opportunities

Other online shopping opportunities

Alibaba and JD.com both offer livestreaming. However, Douyin, the Chinese equivalent of TikTok, has become a major platform for livestream commerce or live shopping. In China other shopping festivals remain popular as well, such as June’s fortnight-long ‘618’ sales, celebrating the anniversary of JD.com. It includes promotions, exclusive deals, flash sales, short videos and live shopping events. There are also the Spring Festival, Valentine’s Day, and the Mid-Autumn Festival to choose from.

In India Google shut down the Great Online Shopping Festival (GOSF) which lasted for just three years, from 2012 to 2015. Even though sales increased from 8million to 50million in that time, Google argued other ecommerce providers offered year-round deals. Moving on more than a decade, India’s online shoppers now focus on the period around Diwali and Dussehr. However, preferences are shifting to Black Friday and Cyber Monday, although research still takes place during the festive season.

There are also many other national and regional online shopping festivals worldwide focusing on key religious and historic dates.

Popular online shopping events started as one-day discounts but have expanded into weeks of online promotions. This year observers expect to gain insights into consumer confidence in the face of worldwide economic and political uncertainty.

In China the consumer prices index (CPI) fell in October compared with September and the same time last year. With declining exports and uncertain returns on investment in China, shoppers are facing high redundancy and reduced incomes. People’s homes tie up most of their assets. As China’s housing prices continue to fall economic confidence around the world is affected. As a result, overall retail sales growth hasn’t yet returned to pre-pandemic levels and consumer confidence remains low.

Price reductions and special offers have previously dominated shopping festivals. However, sales of high value and luxury products are also likely to see a downturn in sales this year.

Are shopping festivals under pressure?

New Shopping Experiences

New shopping experiences

Shoppers who have seen their disposable income fall dramatically are more likely to invest in high-quality and high-value products. Rather than concentrating on shopping festivals they are spreading their spending throughout the year. They are also buying a wider variety of goods and services online.

The popularity of livestreaming across Asia highlights the trend for converging sales, social and entertainment channels. Retailers can extend ecommerce sales events throughout the year with integrated marketing across multiple channels and in-store.

In the future we might expect to see growing communities of loyal shoppers around the world. They will spend more time and money on their preferred platforms. As quality content is rewarded in its own right, fandom shopping throughout the year could replace discount based shopping festivals.

Outstanding brand-based omnichannel experiences can recreate the shopping festival atmosphere and help to build customer loyalty. Adding flexible payment options to boost customer confidence in financially uncertain times will help to build and maintain sales.

For advice on how to build your own exceptional omnichannel experiences talk to one of our experts today.

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