China Singles Day festival, the globe’s singular largest online shopping festival event, culminated on November 11 with indications of another year of muted growth.
Held on the 11th day of the 11th month, this annual festival provides an opportunity for single individuals to both provide or receive a holiday gift. In prior years, this Chinese online festival served as the global kickoff of the November-December holiday period, but with the history of the prior global pandemic, U.S. and other global wide retailers have initiated holiday related promotions earlier in November. This year provided a similar notion with major U.S. and other global retailers featuring Black Friday sales promotions at the very start of November.
2023 China Singles Day Shopping Festival
Similar to what occurred last year at this time, major online retail platform providers Alibaba and JD.com each indicated that their platforms experienced year-over-year gross merchandise value (GMV) revenue and volume growth but would not share added details. This year’s Singles Day began on October 24 and concluded on November 11th. It is important clarify that in China, GMV sales are often adjusted downward because online consumers tend to buy goods with rather attractive discounts, only to return them at a later date.
A published report by Reuters cited data from quantitative analysis firm Syntun that estimated that GMV sales volumes across all major e-commerce platforms rose by 2.08 percent to 1.14 trillion yuan, equivalent to $156.4 billion. That compared to a reported growth of 2.9 percent in 2022. Further reported was that expectations for sales growth prior to this year’s festival were subdued as China’s consumer economy continues to struggle economically. The Reuters report further cited a Bain and Company survey published prior to the festival, surveying a reported 3,000 prospective consumers, that found that 77 percent had planned to spend less or the same amount at this year’s event.
The South China Morning Post indicated in its reporting that Alibaba rival JD.com indicated that transaction and order volumes along with user involvement- “reached all-time record highs, calling this year’s shopping festival another “record breaking” event.” This platform provider reportedly also offered 10 billion yuan ($1.4 billion) subsidies since March to hosted retailers and businesses which was touted as “its largest sales promotion event in history.”
In a prior Supply Chain Matters commentary, we highlighted the NRF’s latest forecast for U.S. focused holiday period spending during the November thru December period.
Contrasted with last year’s especially strong 5.4 percent level of holiday spending, the current forecast calls for a range of between 3 percent and 4 percent over 2022 levels. That equates to a range of between $957 billion to nearly $967 billion. A prior record established in 2022 was $929.5 billion for the two month period.
The retail industry association further expects online and non-store sales levels to increase between 7 percent to 9 percent. The forecast further reinforces that similar to last year, households are expected to focus most of their holiday shopping on traditional in-store purchases which reinforces that in-store holidays sales have very likely already begun.
Last year, retailers were hampered with too much excess inventory bought by robust consumer focused product sales that occurred earlier in 2022. By the end of the year, consumers dramatically shifted their buying tendencies toward travel and personal experience events.
This year, major U.S. retailers have reported that they have worked off considerable portions of their prior excess inventories and are highly focused in promoting and offering products that will be in high demand regardless of consumer’s other buying preferences for the upcoming policies. One report we reviewed indicated indications that U.S. consumers will prefer to take an added vacation during the holiday season.
As always, ongoing events will provide industry supply chain management teams with continual response and fulfillment challenges, all focused on meeting and achieving 2023 revenue and profitability expectations.
The holiday fulfillment season in now in full swing.
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