Shanghai - After more than a decade of explosive growth, China's Singles' Day, the world's biggest online shopping fest, is losing its gloss and bracing for more modest growth in coming years, hurt by a slower economy and tighter regulatory scrutiny. E-commerce giant Alibaba Group Holding Ltd said on Friday its sales - or gross merchandise value - during the 11 day event grew just 8.5%, the slowest rate ever, underscoring the headwinds for China's tech firms. GMV had grown by at least double digits every year since Alibaba founded the festival in 2009 and built it into a global online shopping fest, dwarfing Cyber Monday in the United States. Last year, it extended the one-day event to 11. But the state-backed Securities Daily newspaper criticised the focus on high turnover from sales for being unsustainable, chaotic and incompatible with China's new development path: "The 'worship of turnover' is not only unsustainable in terms of digital growth but is also inextricably linked to chaos," the newspaper said.
Analysts said the weak performance this year also reflected how Chinese consumers have increasingly become weary and wary of the day's promotions and the quality of service. Shoppers have also become more cautious about spending in general due to new coronavirus outbreaks and supply disruptions that have hurt sales and contributed to China's economy suffering its slowest growth in a year in the third quarter: "The magic of Double 11 is fading," said Sharry Wu, Greater China consulting business transformation leader at consulting firm EY, referring to Nov. 11, which was originally an unofficial day to celebrate being romantically unattached: "Brands have to understand after years of practice, Singles' Day is not their guaranteed sales booster."The event has historically been headlined by eye-catching bargains and livestreaming promotions. It is also a big sales boost for companies such as Apple and L'Oreal , which sold more than 100 million yuan ($15.7 million) worth of products each over the 11-day event this year.
Still, Alibaba said a record 290,000 brands and 900 million consumers participated this year and 78 businesses saw their GMV grow more than 10 times compared with last year to more than 100 million yuan. A record number of luxury brands joined in, including Max Mara and Saint Laurent for the first time. Citi analysts said that while the event's GMV missed their expectations, they were happy enough with more modest growth: "Following an unprecedented year of multiple headwinds, we are relieved to see Singles Day momentum settle with a new norm of moderated growth," they said.