China's Singles' Day festival sees cautious spending amid weak demand

China's biggest online shopping festival is struggling to persuade anxious consumers to spend more, despite discounts.

Singles' Day sales and consumer sentiment

Retail data platform Syntun said cumulative sales as of Oct. 31 totaled just over 1 trillion yuan ($154 billion), broadly in line with the same period last year. Retailers have increased sales mainly by extending the festival.

Consumer demand in China remains subdued as a prolonged property downturn and other pressures weigh on confidence. "Optimism over a recovery in domestic demand has faded," said Max Zenglein, Asia Pacific senior economist at The Conference Board. "Improvements in sentiment have repeatedly proved short-lived."

AI tools and shifting purchases

E-commerce giants such as Alibaba have turned to artificial intelligence to encourage frugal shoppers to spend more. Alibaba integrated its Qwen AI into its Taobao and Tmall platforms to help shoppers place orders and find products.

Plans offering AI tokens are also being prominently promoted during Singles' Day for the first time. This month, a livestream by Li Jiaqi, dubbed the "Lipstick King" for his huge lipstick sales, sold plans covering roughly 2 trillion tokens within half an hour, according to Chinese media.

Weak domestic demand and bright spots

While China's broader economy continues to grow at a relatively robust pace, expanding 4.6% from a year earlier in January-September, much of that momentum came from a boom in exports. Retail sales of consumer goods rose just 1.1% over the same period.

Home prices have fallen roughly 20% or more from their 2021 peak, with smaller cities and the resale market seeing steeper declines. In the southern furniture manufacturing hub of Foshan, 24-year-old Gabby Liang said she was feeling cautious.

"I've been buying much less online, especially when it comes to non-essential items," she said. "During the Singles' Day festival last year, I bought quite a bit of skincare products. But this year I expect to buy fewer."

Health-related products are selling relatively well. According to WPIC data, online sales of imported fish oil rose nearly 43% from a year earlier in the 12 months through September. Sales of other supplements aimed at improving sleep or supporting joint and bone health grew between 28% and 37%.

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Sources

• apnews.com: Chinese consumers remain cautious about spending on Singles' Day | AP News
• ca.finance.yahoo.com: China’s Singles' Day shopping festival struggles to shake off weak consumer spending

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.