China’s leading e-commerce companies, Alibaba Group and JD.com, have reported significant year-on-year sales growth as the Singles Day festival concluded at midnight on Saturday.
Alibaba recorded positive sales growth for its platforms Tmall and Taobao, while JD.com reported record-high sales volumes.
According to data provider Syntun, cumulative gross merchandising volume (GMV) sales across major e-commerce platforms increased by 2.08% to 1.14 trillion yuan ($156.40 billion), compared to 2.9% growth last year.
Originally a 24-hour online shopping event held annually on November 11 in China, Singles Day has evolved into weeks of promotions across various e-commerce platforms and physical stores.
Despite subdued expectations for sales growth due to economic challenges, Alibaba encouraged merchants to offer aggressive pricing during Singles Day.
The company aimed to counter competition from rivals like Douyin and Pinduoduo by offering discounts on 80 million products, leading to a higher prevalence of 40%-50% discounts.
A recent report by Bain and Company revealed that 77% of surveyed consumers planned to spend less or the same amount on Singles Day compared to the previous year.
Shoppers focused on necessities like tissues, handwash, instant noodles, and pet food, while spending less on discretionary items like home appliances and furniture.
While some consultancies predicted a return to double-digit GMV growth, the final sales picture, considering potential high return rates, will take time to emerge.
Analysts anticipate increased returns as consumers may purchase more to avail larger discounts, subsequently returning unnecessary items.
Health and wellness-related products, along with items associated with outdoor lifestyles, were expected to perform well.
Alibaba reported a notable 300% increase in sales of road bikes during the initial hour of the Singles Day sales period.
However, color cosmetics faced challenges due to persistently low makeup demand nearly a year after China lifted strict COVID-19 restrictions.
The sales growth figures do not factor in returns, and analysts expect return rates to be elevated this year.
