SHANGHAI, Nov 11 (Reuters) – Alibaba Group Holding (9988.HK) and other Chinese e-commerce companies holding Singles’ Day shopping events together saw a 4.7% drop in sales in the first 12 hours of the past day, a research firm said.
Consultancy Syntun’s estimate was in line with moderate expectations for this year’s Singles’ Day – the world’s biggest online shopping festival which, despite its name, has turned into a weeks-long event and is a key barometer of Chinese retail demand.
Analysts have forecast steady or only slight growth in Alibaba’s sales, noting that Chinese consumer sentiment is at an all-time low – hit hard by the country’s strict COVID restrictions and a sharp downturn in the economy.
The e-commerce giant also did not hold its usual celebrity gala. It’s part of an effort to play down the hype surrounding the event as Chinese President Xi Jinping increasingly emphasizes ‘common prosperity’ – a push that aims to eliminate growing wealth inequality. and cracking down on what the Communist Party considers excessive behavior.
Not all early data points to a drop in sales. Syntun estimated a 5.7% increase in gross merchandise value (GMV) in the first four days through November 3 on e-commerce platforms.
But it is expected to be the weakest year on record for GMV growth.
Citi analysts said this week they conservatively expect Alibaba’s GMV for the event to be between 545 billion yuan and 560 billion yuan ($75 billion to $77 billion), a growth of 0.9% to 3.6%.
This compares to an 8.5% increase last year and a 26% jump in 2020. Prior to 2020, the festival was a one-day event.
But they predicted rival JD.com would fare a little better as it is strong in consumer electronics and home appliance offerings which are expected to remain popular.
Alibaba and JD.com did not respond to requests for comment on their overall GMV outlook. They should give the final counts after midnight Friday.
Successful brands include Apple Inc. (AAPL.O)with JD.com claiming there was 1 billion yuan in sales for the US tech company’s products in the first minute of the event’s final sales period on Thursday evening, which is marked by larger discounts.
Alibaba said sales of high-tech beauty devices such as gadgets to refresh and lift facial skin jumped some 5,570% from a year ago, while carpet cleaners and appliances smart kitchen appliances were also selling extremely well.
Yang Zengdong, 40, a teacher in Shanghai, said she had doubts about participating in Singles Day this year, but when the latest sales period started on Thursday night, she ended up buying about the same amount as last year.
“I think it’s deep in the minds of Chinese people that if you don’t shop on Singles Day, you’re missing an opportunity,” she said.
Reporting by Casey Hall and Sophie Yu; Editing by Brenda Goh and Edwina Gibbs
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