Chinese consumers have become more rational and are carefully reviewing their needs, with a focus on purchasing daily necessities and high-quality products during this year's Singles Day shopping carnival, industry experts said.
They said online retailers need to prioritize customer loyalty over further discount-led sales gains, considering Chinese shoppers are inclined to shop across multiple platforms.
The Nov 11 shopping festival still remains the biggest shopping event of the year in China, but consumers are likely to spend their hard-earned money more selectively this year, said a report released by global consulting firm AlixPartners on Thursday.
Sampling nearly 2,000 consumers across different age groups and regions in China, the survey found that almost 60 percent of respondents intend to spend more this year compared to last year, while 14 percent plan to spend less amid the increasingly complex economic environment and the rise of sustainable spending.
The value of goods and services has become a key consideration for consumers. While overall consumption remains stable and strong, 39 percent of all surveyed consumers said they pay more attention to product quality and will only spend when they have adequate product information, the report said.
"Almost half of surveyed consumers plan to increase their spending over last year on daily necessities, followed by purchases of clothing, fashion items, footwear as well as household and lifestyle products. In contrast, 39 percent of interviewees have no plans to purchase luxury goods during this year's event," said Justin Koh, senior vice-president of AlixPartners.
The report said some shoppers have become more cost-conscious when participating in the Singles Day shopping festival, as 34 percent of respondents said they will think twice before spending and will only spend when necessary, given that global economic downward pressure might weigh on consumer sentiment and retail sales.
Apart from the Singles Day shopping gala, 88 percent of interviewees said they also participated in other discount festivals throughout the year, but the Nov 11 campaign remains the most attractive discount extravaganza.
In addition, Chinese consumers are increasingly shopping across multiple platforms, as 69 percent of respondents said they plan to visit three or more platforms, up from 56 percent in 2021, said a report from consultancy Bain & Company.
Strikingly, 37 percent of interviewees plan to use five or more platforms this year. The company polled some 3,000 Chinese customers on their attitudes toward the annual shopping gala.
"Even with the changes in consumer behavior, the COVID-19 pandemic and the impact of global macroeconomic conditions, Singles Day continues to be a priority for Chinese retailers," said Kelly Liu from Bain & Company.
Liu said the two major annual online promotion events — Singles Day and the June 18 shopping carnival — generated 12 percent of all online retail sales in China in 2021.However, participation is now being driven more by customer loyalty.
Gross merchandise value may surpass 1 trillion yuan ($138.3 billion) for this year's Singles Day, the consultancy said, while emphasizing Chinese retailers need to find a balance between promotions and long-term quality growth.
China's retail sector has entered a "fight for loyalty" stage, with its focus shifting from headlong growth to retaining customers and building profitability — all while taking a more integrated approach to online and offline channels, the report added.