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Double-11 annual shopping event: E-commerce continues to boost retail sales

2020-11-13 16 minute read China

Single's Day -- world's largest shopping festival, also known as Double-11, or simply 11.11

This years’ Double-11 (11.11, aka Singles’ Day) shopping festival was undoubtedly closely watched both in China and overseas for hints on the direction of the recovery, consumer confidence, and retail trends. The sales performance seen across all the different channels and product categories didn’t disappoint.

E-commerce continue playing a vital role in boosting China’s economy following slump in retail activity induced by COVID-19 situation early in 2020. Although it is far from over until an effective vaccine is widely available, the pandemic in China is largely under control and the consumer confidence is surging. Despite the challenges and shifts in consumers’ priorities, with the strong recovery of business activities, the economy is back on track.

China’s retail sales continued to pick up steadily since March 2020, and as of September 2020 it is up 3% year-on-year (National Bureau of Statistics). In the first three quarters of this year, China’s total retail sales reached 27.3 trillion yuan (USD $4.13 trillion), with online retail sales accounting for 8 trillion yuan (USD $1.2 trillion), up 9.7% year-on-year (Ministry of Commerce).

Retail sale figures for the last quarter of the year are posed to see another significant boost when the largest annual shopping event conclude, followed by another annual shopping festival, Double-12 (12.12) in December.

Online sales bring retail sector back on track

The annual shopping festival, Double 11, is seen by many as a proxy for consumer spending, retail trends, and a barometer for economic health in China. This year was again record shattering.

During this year’s event, the combined reported sales across the board reached a staggering 860bn yuan (USD $130.0bn), maintaining the status of the world’s largest annual shopping festival, and providing further evidence of recovery both for the brands and the platforms.

The two leading online retail players — Alibaba and JD.COM — have reached a combined 769.7bn yuan (USD $116.4 billion) GMV. These e-commerce giants jointly contributed 89.5% (Tmall 57.93%, and JD.com 31.57% respectively) of the total reported sales (GMV) during this year’s 11 day shopping spree.

Tmall (Alibaba Group) Singles’ Day sales reached 498.2 billion yuan (USD $75.3bn), a 26% YoY increase.

Jingdong (JD.COM), during the same period between 1st and 11th November, has recorded 271.5bn yuan (USD $41.1 billion) in GMV, its highest increase in recent years of 32% YoY.

Overall, there were approximately 250,000 brands and 5 million merchants participating, attracting more than 800 million customers.

In terms of foreign brands and imported products, for Alibaba alone, there were nearly 1.2m new imported products and 2600 overseas brands listed across their platforms.

By the close of the event, some 450 brands have each exceeded 100m yuan (USD $15.1m) in GMV.

Beyond Alibaba & JD.COM

Although the online B2C retail industry is still dominated by Alibaba and JD.COM — with the third player, Pinduoduo, rapidly increasing its market share — it doesn’t stop other players from joining the festival with their own events. Performance from those platforms demonstrate that the shopping festival popularity is not only growing every year, but it is also evolving.

Other popular platforms that reported strong performance include Douyin: 15.2 billion yuan GMV (USD $2.30 billion), Suning: 75% increase year-on-year, Mogujie: 82% increase year-on-year.

However, it would give an incomplete picture if we didn’t mention that some platforms actually played down this year’s festival. Kaola 考拉海购 (acquired by Alibaba Group in 2019) and Yanxuan 网易严选 (owned by NetEase), officially declared that they’re not participating in the world’s largest shopping festival opposing complicated discount schemes and excessive consumption.

Top categories in 2020

As during the early stages of the pandemic, daily commodities, clothing, furniture, as well as food and drinks continue trending.

Pre-buy activities gave strong indication that the vast majority of consumers were willing to either keep the level of spending, or even increase their expenditure, comparing to the last year’s festival.

According to pre-sale consolidated data captured by the different platforms, this year’s most popular categories for the Double 11 festival were:

  • Home appliances, including TVs and white goods such as refrigerators, washing machines, ovens, dishwashers, microwaves, as well as air conditioning and air purifiers;
  • Skin care and beauty products, such as facial wash, creams, lotions, serum, beauty masks;
  • Cosmetics and perfume, including lips sticks, eye shadows, brushes, mascara, eye make up, toiletries;
  • Women’s fashion & apparel, including clothing, accessories, and shoes;
  • Food and drink, such as coffee and bubble tea, snacks (including chocolate, biscuits), and healthy snacks (nuts, dried fruits, oats, cereals, etc.);
  • Other food and drink, including fresh produce and groceries.

To add to this picture, both Tmall and JD.COM have also seen strong demand boost in high-end brands, mainstream and designer luxury brands in particular. The mainstream luxury brands are well known in China and these continue to perform strongly, whereas new brands are showing increasing potential.

Another area that has seen strong demand was JD Health and JD Pharmacy. There was a very strong demand for health products and services which is not surprising as the pharma e-commerce in China has been already showing great potential even before the pandemic struck earlier this year.

The bottom line

China’s economy is seeing a strong V-shaped recovery that has put it ahead of other countries. The world’s second largest economy recorded a growth of 4.9% in Q3 (from July to September), according to official data.

Strong performance in the retail sector would not be possible without e-commerce. Following a slump in retail activity due to the coronavirus outbreak, consumption growth is showing signs of recovery with household consumption likely to drive China’s economy in 2021 (Goldman Sachs).

The opportunities that China’s innovative online economy offers, together with the strong performance recorded during this year’s festival, are a beacon for foreign brands and exporters. Cross-border e-commerce and exporting are not only one of the best ways to grow any-size business, trading internationally can also improve long-term resilience through market diversification.

At ACOLINK we help brands and exporters enter and grow in the Chinese market. Our services range from initial support on market entry strategies, through market research, lead-generation and prospecting, to fully managed solutions where we act as your highly experienced export sales team, or manage your online sales through China’s many online platforms. Get in touch with our team to discuss the options.