China's annual shopping event surpasses predictions.

• Weak consumer sentiment led major e-commerce companies to stop reporting gross merchandise value for the third consecutive year.
• Chris Reitermann, CEO of Ogilvy APAC and Greater China, stated that while many brands may have underestimated the outcome, it likely turned out better than expected on a low level. However, it's unlikely that anyone would claim they hit it out of the ballpark.
• Daniel Zipser, senior partner at McKinsey and leader of its Asia Pacific consumer and retail division, stated that there has been a noticeable increase in consumer sentiment over the past six weeks.

The Singles' Day shopping festival in China resulted in unexpected spending by consumers, despite a sluggish retail market, according to consulting executives.

This year, the country's version of Black Friday began on Oct. 14, a week earlier than in 2023, and ended on Monday. Despite this, major e-commerce companies did not report gross merchandise value, an industry measure of sales over time, for the third consecutive year due to weak consumer sentiment.

Chris Reitermann, CEO of Ogilvy APAC and Greater China, and president of WPP China, stated that while many brands may have underestimated the outcome, it likely turned out better than expected on a low level. However, it is unlikely that anyone would consider it a home run.

Although many multinational corporations that sell consumer products in China are more cautious on the market and may be struggling, Reitermann stated that many of these companies are still "very profitable" in the country, even if their growth has slowed to the low single digits instead of high double digits.

This year's Singles Day saw "robust growth" in GMV and a "record number of active buyers," while the number of shoppers on Alibaba's platform rose by more than 20% year-over-year.

The Chinese government's stimulus measures since late September have fueled a stock market rally, coinciding with the shopping season that celebrates single people, known as Double 11.

"Daniel Zipser, senior partner at McKinsey and leader of its Asia Pacific consumer and retail division, stated that there has been a rise in consumer sentiment over the past six weeks. However, he cautioned that it is difficult to predict what this trend will mean in the future."

Zipser noted that while Singles Day exceeded expectations for most brands, sales growth was not uniform across all categories. Instead, he highlighted pockets of growth in specific categories such as outdoors, pet care, and "blind box" toys.

The blind box category, which was previously worth $0, has grown to become a billion-dollar industry in China, demonstrating the rapid pace of consumer adoption.

According to a Reuters poll, China's retail sales for October are predicted to increase by 3.8% compared to the previous year, surpassing the 3.2% growth recorded in September.

Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, stated on Tuesday that he observed an increase in spending by people this year. The company assists foreign brands, including Vitamix and IS Clinical, in selling online in China and other parts of Asia.

Cooke predicted that the shopping festival would experience a 16% increase in GMV compared to the previous year, which is likely to be the strongest growth in recent years. He stated that brands wouldn't need to reduce their prices as much.

Alibaba's Tmall, JD.com, and PDD experienced a 20.1% year-on-year increase in sales during the Singles Day period, totaling 1.11 trillion ($150 billion), according to research firm Syntun.

JD.com and Alibaba will release their quarterly results on Thursday and Friday, respectively, providing investors with more information on China's consumption later this week.

"According to Deborah Weinswig, founder and CEO of Coresight Research, consumers who have saved for a rainy day have made purchases during the Double 11 shopping festival."

The company's weekly survey has shown a shift in consumer sentiment over the past month.

Hopes for a recovery in 2025

Since the Covid-19 pandemic, China's consumer spending has been affected due to economic uncertainty, with a real estate slump reducing household wealth and slowing economic growth.

Premium brands are disappearing quickly, but higher-end brands can still succeed, according to Reitermann. He pointed out that local brands are often lower-priced and able to enter the market more quickly.

In the second half of next year, consumer confidence may improve due to the anticipated announcement of additional stimulus in the first half.

The Chinese government may provide additional fiscal support in 2025, as it did not distribute cash to consumers during the pandemic but introduced a trade-in program to reduce the cost of car and home appliance purchases this year.

— CNBC's Sonia Heng contributed to this report.