On Alibaba’s Singles Day, Chinese consumers look to spend more, shift away from American brands

29-Oct-2020 Intellasia | CNBC | 6:02 AM Print This Post

The e-commerce giant Alibaba’s annual Singles Day shopping event could be a boon for Chinese brands, according to a new survey.

Sixty-six percent of Chinese consumers say they’ll be shopping for domestic brands over foreign labels during the shopping event, which is held on November 11 each year. This is global consulting firm AlixPartners’ third survey tied to the event. It polled 2,029 adult Chinese consumers from September 30 to October 6. The majority surveyed, or 62%, cited “patriotism” as their reason for buying local. A year ago, 51 percent of those polled had a similar answer.

Spending overall is expected to eclipse previous records, as Chinese consumers rebound from the shutdowns put in place during the coronavirus pandemic. Singles Day 2019 drew more than $38 billion in sales.

Thirty-nine percent of Chinese consumers plan to spend more on Singles Day this year compared with last, the survey found. Only 15 percent plan to spend less, it said, with the majority of those people citing the pandemic’s impact on the economy for their concern.

Fifty-seven percent of Chinese consumers plan to spend less money on American products this year, AlixPartners found. Thirty-nine percent plan to cull spending on European brands.

“Historically, American products scored very highly on [brand] attributes,” David Garfield, global co-leader of the consumer products practice at AlixPartners and a managing director at the firm, said in an interview. But, “Chinese consumers increasingly are feeling like they can get these benefits elsewhere,” he said. “It goes beyond geopolitical talk or any trade flow impact.”

Meanwhile, with international travel largely at a standstill, affluent Chinese consumers are splurging on luxury products at home. China is the top destination among consumers for luxury goods, at 43%, according to AlixPartners’ survey, followed by Japan, at 30%. The United States did not make the top four.

“It’s a genuine advancement on the part of Chinese manufacturers,” said Garfield. “They’re getting more sophisticated in their marketing of luxury products.”

The shift could have implications for American brands, including those in the luxury space, that have grown more reliant on Chinese spending. Tourism sales have plummeted during the pandemic at companies ranging from Macy’s to Tiffany.

This year will mark the 11th edition of the annual Singles Day event also called the Double 11 shopping festival because it falls on November 11.

https://www.cnbc.com/2020/10/28/alibabas-singles-day-2020-chinese-to-shun-us-brands-alixpartners.html

 

Category: China

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