China’s biggest shopping event of the year beats low expectations | Wilnesh News

BEIJING — Consumers spent more than expected during China’s Double Eleven shopping festival amid a tepid retail environment, a consulting company executive told CNBC.

The country’s version of Black Friday started on October 14 this year, more than a week earlier than in 2023, and ended on Monday. Major e-commerce companies used to report gross merchandise value, an industry metric that measures sales over time, but for the third year in a row they have not reported due to weak consumer confidence.

Chris Reitermann, CEO of Ogilvy Asia Pacific and Greater China, said: “I do think that for many brands, the results may be a little better than they thought, but at a lower level. Probably no one will say that we have reached expectations. Goal. He is also the President of WPP China.

Reitman said many multinational companies selling consumer goods in China are more cautious about the market, if not in trouble. But he noted that many companies remain “very profitable” in the country, even as their growth has slowed to the low single digits rather than the high double digits.

This year’s Double Eleven, Alibaba Claiming “strong growth” in GMV and “record number of active buyers”, while Jingdong It said the number of shoppers on its platform grew by more than 20% compared with the same period last year.

In celebration of the shopping season for singles, also known as Double 11, the Chinese government has announced a series of stimulus measures since the end of September, driving the stock market higher.

Daniel Zipser, a senior partner at McKinsey and head of Asia Pacific consumer and retail practice, said consumer confidence “seems to have increased” over the past six weeks. “It’s hard to predict what this will mean for the future.”

Zipser said Singles Day exceeded most brands’ expectations. But he noted that sales weren’t rising across the board, but were seeing some growth in categories such as outdoor, pet care and “blind box” toys – in which consumers buy uniformly labeled boxes in order to win new ones. Collectible opportunity.

He noted that the blind box category has grown from $0 pre-Covid-19 to a more than $2 billion industry, reflecting the potential speed of consumer adoption in China.

A Reuters survey shows that China’s retail sales in October are expected to increase by 3.8% year-on-year. That would be an improvement from September’s 3.2% growth.

“We’ve seen people spend more this year,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, which helps foreign brands like Vitamix and IS Clinical sell in China, told CNBC on Tuesday and other parts of Asia for online sales.

He expects the shopping festival’s GMV to increase 16% from last year, which may be the strongest performance in years. Cook added that brands don’t have to cut prices significantly.

Research company Syntun say tuesday Alibaba’s Tmall, JD.com and Pinduoduo’s sales during Double Eleven are expected to increase 20.1% year-on-year to 1.11 trillion (US$150 billion).

Investors may get more details on Chinese consumption later this week. JD.com is scheduled to release quarterly results on Thursday, followed by Alibaba on Friday.

Deborah Weinswig, founder and CEO of Coresight Research, told CNBC’s “Squawk Box Asia” on Tuesday: “We are seeing consumers saving money for emergencies and saving money for emergencies. Purchase during the Double 11 Shopping Festival.

She said the company’s weekly survey showed some “differences” in consumer confidence last month.

Consumer spending in China has come under pressure as households grapple with economic uncertainty since the Covid-19 pandemic. The housing slump has reduced household wealth and economic growth has slowed.

While high-end or mid-range brands are “fast disappearing”, high-end brands, e.g. lululemon Reitman said it can be done well. He generally noted that local brands tend to be cheaper and can enter the market faster.