Consumer Transformation, Economic, and Political Pressure? Alibaba Cancels Double Eleven Gala

Ma Yun (Web Screenshot)

[People News] Rumor has it that the annual event for Double Eleven Shopping Festival—the Tmall Gala Night, also known as "Cat Night," will be canceled for the first time this year. What has led to the end of this consumer era?

According to Radio Free Asia, as the Double Eleven Shopping Festival approaches, China’s main e-commerce platforms began promotional activities a month ago. Known internationally as "Taobao," Alibaba’s cross-border trading platform "AliExpress" has introduced the same concept to the U.S., allowing consumers to add discounted products to their shopping carts starting Friday and make purchases within a week from November 11.

However, according to Chinese media LatePost, Alibaba will no longer host the grand, Spring Festival Gala-style "Tmall Double 11 Gala Night." This is the first cancellation of the event, known as "Cat Night," since Alibaba established it in 2015, attracting international stars like Kobe Bryant and Taylor Swift (except for 2022 when it was canceled due to the pandemic).

Many believe that Alibaba’s decision to cancel Cat Night and turn its attention to international markets may be related to the low consumer levels in China. As a pioneer of online shopping in China and an e-commerce giant, Alibaba has faced fierce competition from other platforms like JD, Douyin, and Pinduoduo, especially after a three-year period of antitrust rectifications.

Radio Free Asia has reached out to Alibaba for a comment on the cancellation of Cat Night but has not received a reply by the time of publication. East West Bank Chief Economist, Rayliant Global Advisor founder and Chief Investment Officer Xu Zhongxiang responded via text message in an interview with Radio Free Asia, stating that in his understanding, the primary reason for Alibaba canceling Cat Night is consumer fatigue. To make Double Eleven stand out among many promotions, new and unique elements are needed, and Alibaba is working hard to reconceptualize this.

Consumer Fatigue Plus Political Pressure Leads Alibaba to Keep a Low Profile

Regarding Alibaba’s decision to cancel Cat Night this time, Andrew Collier, a senior research fellow at Harvard University's Kennedy School of Government’s Mossavar-Rahmani Center for Business and Government and author of Tech Wars: Why China is Cracking Down on its Tech Giants, told Radio Free Asia that, in addition to the above economic challenges, Alibaba is also under tremendous political pressure. He explained that under Xi Jinping's suppression of the private sector, even with Alibaba’s superior cloud computing services, state-owned enterprises with ample capital and borrowing conditions would still prefer to partner with Huawei, which has better ties with Beijing.

Collier added that, at its peak, Alibaba must now keep a low profile, working to expand internationally and into other fields without attracting too much attention to survive: “Alibaba, still maintaining a low profile after the 2020 crackdown, doesn’t want to make breakthroughs in online retail or consumer spending, as Xi Jinping aims for economic growth and healthy consumer behavior but doesn’t want too much capital directed towards consumption. Instead, he wants capital retained in the industrial and technology sectors, which I call technological nationalism… Furthermore, any company occupying too large a market share will not end well, as Xi Jinping doesn’t want the private sector to hold too much economic and financial power.”

After the CCP ended its strict COVID lockdown, Alibaba resumed Cat Night in 2023. But this year, the budget was redirected to support consumers and merchants, including 30 billion yuan in consumer vouchers and red envelopes, along with 3 billion yuan for merchants—Alibaba’s largest subsidy effort to date. Collier believes the cancellation of Cat Night also reflects a shift in Alibaba’s development goals, moving from one-time sales growth to a focus on long-term growth.

E-commerce Market Transformation: Consumers Compare Options

Huang Mingwei, former Alibaba executive and special assistant to founder Jack Ma for international affairs, told Radio Free Asia that China’s retail e-commerce market is already mature and no longer needs Cat Night to attract customers and raise public awareness of online shopping. In addition, younger generations prefer “dispersed consumption,” which means they are more responsible and value-conscious when comparing options. They care more about the value or experience beyond the product itself: “The issue is which merchant or e-commerce platform they choose…; thirdly, I think consumers are no longer fascinated by the extravagance and glamour of Singles’ Day consumerism.”

Huang believes that Alibaba wants to allocate resources effectively to offer the best user experience rather than relying on massive orders or transaction volumes to test and improve Alibaba’s e-commerce ecosystem and infrastructure as in the past. He noted that Alibaba now places more emphasis on loyalty programs like 88VIP membership, “rather than just providing cheap products. As far as I know, growth in this area has been quite strong.”

An Alibaba employee responsible for the Cat Night project told LatePost that the entire major promotion is evolving, “from centralized purchases on Double Eleven to every day now.”

However, the report also pointed out that Cat Night’s most glorious days were before the pandemic. Since then, international stars no longer attended, and the growth rate of Double Eleven's transaction volume slowed from the third year onward. In 2021, Alibaba’s Gross Merchandise Volume (GMV) growth rate fell below 10% for the first time, and the media center no longer provided data screens or hourly updates. The following year, GMV figures were not disclosed.

Collier commented that despite official CCP data showing domestic consumer purchasing power remains strong—with a roughly 5% increase in per capita disposable income and property income and per capita consumption expenditure in the first three quarters of 2024 compared to the same period last year—these figures contrast with layoffs, pay cuts, and sluggish retail sales, raising doubts about the authenticity of CCP data.

In 2020, the CCP government conducted an antitrust investigation on internet companies, using Alibaba as a prominent case. In April 2021, the CCP fined Alibaba 4% of its 2019 domestic sales, totaling 18.228 billion yuan, and mandated a three-year self-inspection and rectification. Subsequently, other tech companies such as Baidu, Tencent, Meituan, JD, and Didi were also fined.