China’s Economy Slows, “Double 11” Lacks Buzz

China's Economy on a Roller Coaster, Shaking and Sliding Downward (Graphic by People News)

[People News] On Monday (November 11), Chinese merchants and consumers noticed that this year’s “Double 11” shopping festival lacked the excitement of previous years. E-commerce companies are now focusing on overseas markets in search of growth opportunities.

According to Voice of America, the annual “Double 11” (Singles’ Day) shopping event derives its name from the numerical date, November 11. Originally launched by e-commerce platform Alibaba, it offers attractive discounts to encourage heavy consumer spending. The event has since expanded to other domestic and international platforms like JD.com and Pinduoduo.

Initially, “Double 11” was a one-day event, but Chinese shopping platforms now begin promotions weeks in advance to boost sales. The festival is also viewed as an indicator of consumer confidence.

However, weighed down by China’s domestic economic troubles, including a real estate crisis and deflationary pressures, consumers are no longer shopping heavily during the event.

“I only spent a few hundred yuan on daily necessities,” said Wang Haihua (a pseudonym), who runs a fitness center in Beijing.

Wang commented that prices on e-commerce platforms during “Double 11” are not necessarily cheaper than usual.

“It’s all gimmicks, we’ve seen through it over the years,” she said.

Zhang Jiewei (a pseudonym), a 34-year-old who runs a hair salon in Xi’an, also mentioned that he no longer trusts the Double 11 promotions, as some merchants tend to raise original prices before applying discounts, creating an illusion of bargains.

“I used to buy a lot, even bought a phone two or three years ago,” he said. “But since the pandemic, with reduced income, I’ve stopped buying. This year, I don’t plan to buy anything.”

Some experts say that Beijing’s recent stimulus measures have done little to boost consumer confidence.

“People are showing little interest in spending and are cutting back on big-ticket items,” said Shaun Rein, founder and managing director of the China Market Research Group (CMR) in Shanghai. “Since October 2022, economic weakness has meant discounts are available year-round, so Double 11 discounts aren’t any more significant.”

Rein noted that due to consumers tightening their spending in anticipation of economic difficulties, sales growth for this year’s Double 11 shopping festival is expected to be low.

In previous years, e-commerce giants like JD.com and Alibaba (which operates platforms like Taobao and Tmall) would report total transaction amounts for Double 11. Recently, however, they have stopped disclosing these figures. While growth rates in past years were in double digits, recent estimates indicate a decline to single-digit growth.

According to data service provider Syntun, last year’s total transaction volume on major e-commerce platforms grew by only 2%, reaching $156.4 billion, a far cry from the double-digit growth seen before the pandemic.

Merchants typically participating in Double 11 now express that the high cost of advertising, coupled with lackluster sales, makes participation less worthwhile.

Zhao Gao (a pseudonym), who runs a clothing factory in Zhejiang Province, said that after paying advertising fees to e-commerce platforms, he barely breaks even.

“These platforms set many rules for promotions, and consumers have become more skeptical,” he said. “As a business owner, I no longer participate in Double 11 promotions.”

Du Baonian (a pseudonym), who operates a processed lamb food company in Inner Mongolia, noted that consumer spending has dropped, leading to a 15% decline in overall sales over the past year.

Although Du still participates in Double 11 promotions, he finds that the high costs rarely yield returns in such a weak sales environment.

“Our revenue is declining, but advertising on platforms helps us maintain a leading sales position,” he said. He added that he is considering advertising on more e-commerce platforms to attract more customers.

Meanwhile, facing a slowdown in the domestic market, e-commerce platforms are shifting focus to overseas markets for new growth opportunities, including promotions like global free shipping and making it easier for merchants to sell internationally.

For example, in a blog post on Alibaba’s English-language corporate news site, Alizila, the company reported that around 70,000 merchants doubled their sales due to global free shipping. In markets like Singapore and Hong Kong, Alibaba has seen the number of new customers double as well.