Supply Chain Matters begins our perspectives of the current 2022 holiday fulfillment period with highlights of what is usually recognized as the globe’s singular largest online shopping event, that being the China Singles Day festival that culminated on November 11.
Since this festival was first initiated in November of 2009, involvement among major online shopping platforms has expanded within and outside of China. However, reports of this year’s event and equivalent shopper and gross merchandise volumes (GMV) appear to be very muted.
Reuters has reported that Alibaba Group, China’s largest online retail platform provider has not responded to requests for festival volume details, as this year’s 11-day event concluded. Noted was a press release indicating that results were in line with last year’s GMV performance.
Alibaba reported GMV of the equivalent of $84.5 billion GMV for the 2021 11-day event, representing an 8.5 percent year-over-growth rate. That growth rate was considered the lowest ever for this event.
Rival online retail provider JD.com has similarly not shared any festival GMV attainment results other than some overview color.
In its reporting, Reuters cited a Citi analyst indication that this year’s event would range from $5 billion to $7 billion in GMV. Other cited information indicated that during the first 12 hours of the final day, Alibaba and other Chinese online retail providers together experienced a 4.7 percent decline in online sales.
The report further points out that for over a year, Alibaba has toned down Singles Day shopping hype amid added scrutiny from the government. Further, ongoing Covid infection outbreaks and the government’s Zero Tolerance policies involving multiple cities and regions has reportedly impacted consumer shopping behaviors.
Bloomberg indicated in its reporting that a slew of popular livestream stars hawking goods were missing this year, caught up in government crackdowns on celebrity and dulling the glamor and likely hurting results of this year’s festival. Reportedly, Bloomberg Intelligence has projected an unprecedented fall in the value of Alibaba’s transactional volume for the event.
For now, indications of changes to online buying trends will defer to the Thanksgiving holiday, Black Friday and Cyber Monday related U.S. online shopping event.
Then again, last year’s holiday related activity indicated that online shoppers purchased holiday related goods earlier than the Black Friday weekend.
With retailers loaded with added or excess inventories, pre-Black Friday bargains are already being touted, not to mention Amazon’s added second Prime Shopping holiday that provided limited impact to the company’s recent quarterly performance. While retail operating profitability turned positive for the first time this year, a warning relative to all important final quarterly results anticipated concerned investors. The U.S. based online retail provider adjusted its guidance for this current quarter in forecasting a mere 2 percent in overall online retail sales growth and operating profitability guidance expressed as being between zero and $4 billion, which remains a heck of a bandwidth and uncertainty for such a critical quarter.
For now, one likely certainty is that some consumers seeking to receive their new Apple iPhone 14 models by Christmas may have to wait as ongoing Covid outbreaks continue to impact Foxconn’s iPhone City facility in Zhengzhou along with the manufacturing hub of Guangdong.
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