The Singles Day shopping festival in China is nearing its conclusion, and here's how consumers are spending.

• Select categories are showing a pickup during China's largest shopping event of the year, despite expectations of only modest growth in overall sales.
• Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, stated in an interview Thursday that the current trend suggests a slight improvement in GMV growth compared to the previous year.
• "Ashley Dudarenok, founder of ChoZan, stated that sentiment this year is much calmer, with Chinese consumers focusing on purchasing more expensive products that meet their needs rather than simply seeking lower prices."

Beijing - China's largest shopping event of the year is showing signs of growth in specific categories, despite predictions of only moderate overall sales increase.

The Chinese version of Black Friday began on October 14, a week earlier than the previous year, as e-commerce companies and retailers struggle with sluggish consumer spending. The shopping festival, also known as Singles Day or 11.11, has evolved into a weeks-long promotional period since Alibaba launched it in 2008 on November 11.

Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, stated on CNBC Thursday that the company's initial analysis shows that they will experience slight growth in GMV compared to the previous year. WPIC assists foreign brands, such as Vitamix and IS Clinical, in selling online in Asia, including China.

In 2021, Alibaba and JD, China's e-commerce giants, reported a combined GMV of over $139 billion, with Alibaba's GMV rising by 8% and JD's climbing by 28%. However, in 2022, both companies stopped reporting Singles Day GMV due to the pandemic.

According to Syntun, the GMV for Singles Day this year as of Oct. 30 was 845 billion yuan ($119.1 billion). However, it is unclear how these figures compare to 2023 due to the extended promotional period this year.

Nearly 80% of the $145 billion in revenue generated by Chinese e-commerce companies in 2020 came from Alibaba, JD.com, and others, while nearly 20% was generated through livestreaming sales platforms Kuaishou and ByteDance's Douyin, according to the Syntun report.

Although Singles Day GMV growth slowed down to 15% this year, Cooke predicts a better increase of 11% compared to the 19-day festival in 2023, according to his company's data.

"Consumer habits have shifted, with experiential-based products performing better, less in the realm of luxury brands like Louis Vuitton and more in the activewear market such as lululemon, as previously stated."

Subsidies boost appliances

China's subsidies for trade-ins of home appliances, launched in late July, are helping boost sales during Singles Day. Chinese authorities have since late September doubled down on stimulus efforts by cutting rates on existing mortgages and signaling further support.

Analysts at UOB Kay Hian stated in a report that they believe the 11.11 festival this year will be a crucial juncture and will reflect on the recovery trajectory in 3Q24 and 4Q24.

The home appliance category is expected to see sales growth of 4% to 5% on Singles Day, thanks to the trade-in program.

During the first hour on Oct. 14, presales of home appliances increased more than seven-fold compared to the first hour of presales last year, thanks to government subsidies and platform benefits.

JD.com reported a double-digit increase in transaction volume from Oct. 14 to Oct. 31 compared to the same period last year. The company also recorded record sales in consumer electronics and home appliances, without providing specific figures.

According to Dave Xie, partner at Oliver Wyman, the price war among e-commerce platforms has slowed down this year, returning to a more rational level after intense competition. He attributed this to Beijing's stimulus announcements and a recovery in consumer sentiment.

Xie stated that during the early stages of Singles Day, categories including home appliances and consumer electronics, outdoor gear, beauty and cosmetics, and pet supplies have all performed well.

'Micro' shopping trend

In China, the category of toys and collectibles that have gained popularity this year is often based on games or animated series, and is commonly referred to as IP.

International brands are competing for licenses to enter the market and replicate the success of local brands, according to Cooke.

"This year's 11.11 has a significant micro trend that emerged suddenly and rapidly," he stated.

Over 100,000 products based on licenses for popular games such as Genshin Impact and Arknights are being launched on Alibaba's Tmall this Singles Day, according to Yuke Liang, a representative for the business' designer and collectable toy category. These products include collectable cards, figurines, and clothes.

Liang stated that the British toy company Jellycat, along with Lego, launched a Valentine's Day plush dog in China for Singles Day. The 7,000 dogs, priced at approximately $50 each, sold out in seconds.

In late September, Chiikawa, a Japanese manga, launched a Tmall store and experienced over 100,000 simultaneous orders for a $9.72 limited edition plush, according to Liang.

In 2017, Taobao and Tmall began developing the IP category and later elevated it to one of their top-priority segments in terms of product promotion and business focus in 2021. Most buyers are in their early thirties or younger and prioritize spending on products that bring emotional satisfaction.

Sentiment is 'much calmer'

Although there have been some areas of growth, China's Singles Day is not as lively as it used to be.

"Ashley Dudarenok, founder of ChoZan, stated that sentiment this year is much calmer, with Chinese consumers focusing on purchasing more expensive products that meet their needs rather than simply seeking lower prices."

She anticipates that this year's Singles Day may improve slightly and be influenced by different categories.

The shopping promotions officially wrap up on Nov. 11.

Bain & Company's Greater China retail head, James Yang, stated that the firm anticipates "subdued sales" for Singles Day this year, following the pattern of the previous two years.

Alibaba is scheduled to release earnings on Nov. 15, the day after JD releases its quarterly results on Nov. 14.