2021 Singles Day: Record Sales for Subdued Event
China’s Singles Day, previously a celebration of unbridled spending, had a very different tone this year. Thanks to the Chinese government, consumerism is no longer in vogue.
Nevertheless, both Alibaba — whose founder Jack Ma started the event — and JD.com, its closest competitor in revenue, racked up record sales. However, what was once just a 24-hour phenomenon on November 11 — 11-11 — now extends over 11 days.
Alibaba said it reached $84.5 billion in gross merchandise value, the total value of products and services sold on the platform, an 8.5% increase over last year. That was the lowest growth rate since the event began in 2009 and much less than the 26% year-over-year growth rate in 2020. More than 290,000 brands, a record, and 900 million consumers participated on Alibaba’s sites in this year’s event. Sixty-five percent of those brands were small to medium-sized businesses, according to Alibaba.
JD.com fared better in growth, as GMV on its platform totaled $54.6 billion during the 11 days, a 28% increase from 2020. The company said customers from lower-tier markets (smaller cities) accounted for 77% of sales this year, with rapid growth in home appliances, health care, and home decoration. As in the past, electronics were an overall consumer favorite. JD reported that shoppers bought $15 million of Apple smartphones on its site in two seconds. Over 6,000 new apparel brands joined JD’s Singles Day this year.
Also, the volume of products sold globally by JD during this year’s Singles Day increased by 27 times year-over-year.
China Private Sector
The Chinese Communist Party has walked a fine line for years, trying to blend unfettered capitalism with a socialist system. The Chinese private sector has been astoundingly successful. According to the Bloomberg Billionaires Index, China added 307 billionaires in 2020 and has been adding a new billionaire every week in 2021. China has more than 750 billionaires — more than India, Russia, and Germany combined and just behind the U.S. with 830.
Now the Chinese government is nervous about the vast income disparity. Xi Jinping, the president, is promoting the concept of “common prosperity” or making Chinese society more income equitable by narrowing the wealth gap. He has told billionaires that they have to give back to society by sharing their wealth.
The policy extends beyond individuals. Over the past 18 months, the Chinese government has charged numerous technology and ecommerce companies with anti-competitive practices. It has fined them, canceled IPOs, and made life uncomfortable for company founders. Ecommerce platforms Alibaba, JD.com, and Pinduoduo face increased regulations. Officials fined Alibaba $2.8 billion for monopolistic behavior and stopped the $37 billion IPO of its fintech arm, Ant Group, which was ordered to restructure.
Tencent, which has a diversified technology portfolio, including the WeChat app, is also facing greater regulation after being investigated. Delivery service Meituan has been fined. The share price of these companies, many of which are on American stock exchanges, has suffered greatly.
Immediately before this year’s 11.11, the Chinese Ministry of Industry and Information (which oversees the internet) called executives from Alibaba, JD.com, Pinduoduo, and Meituan to a meeting and warned them against bombarding consumers with marketing messages during the event, resulting in fewer promotions and less pre-event marketing.
All the companies complied with the new requirements. Instead of hawking products for Singles Day, the companies touted their efforts at sustainability and contributions to common prosperity. Alibaba promised $15.5 billion to fund common prosperity initiatives until 2025. It has set up a common prosperity task force chaired by its president Daniel Zhang. Tencent pledged $7.8 billion.
In a press release after Singles Day, Yang Guang, vice president at Alibaba, asserted, “We also leveraged the power of 11.11 as a platform to fulfill our social responsibility. This year’s festival was a meaningful milestone as part of our commitment towards building a sustainable future.”
The company also announced that Tmall, its B2C site, would promote green lifestyles by showcasing energy-efficient and low-impact products, as well as issuing $15.7 million worth of green vouchers to encourage consumers to engage in an environmentally-friendly lifestyle.
Alibaba’s logistics arm, Cainiao Network, introduced new packaging in 20 cities to reduce the event’s carbon footprint.
For its green contribution, JD.com announced, “Through the usage of new energy vehicles, solar power system, recyclable packages and more, JD reduced carbon emissions by 26,000 tons during this Singles Day period compared with last year. For example, recyclable packages were used 11.35 million times during the promotion this year.”
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