Singles Day in China is expected to break sales records again this year, but many consumers are now saying they will focus their spending on domestic brands.
An AlixPartners survey of more than 2,000 Chinese consumers says patriotism was a top reason (62 percent) why shoppers will focus their 11.11 spending on native-born brands versus foreign imports, up from 51 percent last year.
Thirty-nine percent plan to spend more on Singles Day this year versus a year ago, with just 15 percent stating plans to spend less due to lingering concerns over Covid-19 pandemic. The big change was the 66 percent who said they plan to buy domestic brands, compared with 62 percent in 2019.
The consulting firm said U.S. brands are set to be most affected by the shift in Chinese consumer behavior. More than half, at 57 percent, said they plan to spend less on American products this year, while 39 percent said they plan to reduce spending on European products as well. This comes as Pew Research finds global consumers’ negative view of China on the rise.
Clothes, fashion and accessories, along with shoes, sporting goods, and cosmetics and skincare, maintained their rankings as the top-three most popular shopping categories in this year’s survey. What’s more, 33 percent cited plans to stock up on medical supplies, masks, food and other essentials during 11.11, in preparation for Covid’s anticipated resurgence.
“Luxury-goods sales appear to be set to rely on domestic channels this year, too, with 43 percent of consumers ranking China as one of their top-three destinations for buying luxury products, with countries like France, the United States, Italy, Germany and the UK all behind, not only China, but also Japan and South Korea,” AlixPartners said.
The shopping bonanza will serve as a “key barometer” for China’s consumer economic health, said David Garfield, global co-leader of the consumer products practice, and might hold valuable clues as to what lies ahead for other markets.
“It will also be a test of whether Western brands can take advantage of pent-up demand in China and break through what seems to be a waning love affair with foreign products, even luxury ones,” he added, advising Western brands to look for ways to make their products attractive and as accessible as possible, “including through channels such as livestreaming.”
Eighty-one percent of Chinese consumers said they will be using livestreaming for shopping, attracted to the potential to nab good discounts, at 38 percent, and get instant and easily accessible information, at 37 percent.
“Over the past 12 months, two-thirds (67 percent) of consumers said they have purchased products via livestreams, with younger consumers and those from smaller, tier-3 and -4 cities leading the way,” AlixPartners said.
In 2019, the first 68 seconds of the Global Shopping Festival saw consumers spend $1 billion online, with $12 billion spend in just the first hour. Final sales for the one-day shopping event last year reached $38.4 billion.
In past years, apparel and footwear sales comprise a high volume of the sales activity. This year, Alibaba’s Tmall gave U.S. brands a chance to pitch products in a “Shark Tank”-like virtual event ahead of Singles Day.
Alibaba Group’s partnership with Universal Music Group’s Bravado division, launched on Wednesday on Tmall Global, showcasing merchandise from other artists, such as Tupac, Guns N’ Roses and The Rolling Stones. New artist collections and collaborations added each month, including one from Taylor Swift, who will debut her newest collection, including her folklore album, during 11.11 two weeks before launching elsewhere.
“We’re extremely pleased to partner with Bravado to give fans in China the opportunity to connect with these remarkable musicians,” Emma Lee, head of fashion for Tmall Global and Kaola, Alibaba Group, said. “Through this partnership, Chinese consumers will be able to access exclusive merchandise from their favorite international recording artists that we know they will enjoy.”