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Shifting trends behind China's record shopping spree

Xinhua | Updated: 2019-11-17 09:50
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E-commerce giant Alibaba said sales on its online shopping platforms reached a record 268.4 billion yuan ($38.28 billion) on Nov 11. [Photo/China Daily]

BEIJING - China's annual shopping spree festival unsurprisingly saw a string of records, while behind these numbers underlie the country's shifting economic trends.

E-commerce giant Alibaba said sales on its online shopping platforms reached a record 268.4 billion yuan ($38.28 billion) on Nov 11, or Singles' Day, marking a year-on-year growth of about 25.7 percent. JD.com hit 204.4 billion yuan from Nov 1 to 11, and Suning's order volume increased by 76 percent year-on-year during that day.

Going online

The annual shopping spree has seen a growing community of online shoppers, expanding further into different age groups and tiers of cities.

Over 500 million consumers shopped on Alibaba's major e-commerce platforms this year, increasing by some 100 million over one year ago, data from Tmall showed.

Among them, consumers born after 1995 accounted for about 30 percent, while those above 50 years old reported the highest growth rate, rising 42 percent year-on-year.

JD.com saw the per customer transaction in third-tier and lower-tier cities grew 130 percent during the Nov 1 to 11 period, with their orders making up over 80 percent of the total.

The growth in online shoppers is partly due to the emergence of social e-commerce platforms, which offer subsidies or discounts to encourage the invitation of new users and group buying.

"Online shopping is already part of the lifestyle of Chinese people, be them young or old, urban or rural," Alibaba Executive Chairman and CEO Zhang Yong said at the "Observing China" forum held Thursday, which aimed to analyze new economic trends.

Going diverse

Along with the growth of Chinese consumers' purchase power, consumption demands are diversifying in terms of brand preference and categories.

Over 200,000 brands worldwide joined the festival on Tmall. Among the platform's 299 brands with sales for each brand beating 100 million yuan on Singles Day, tens of them were fresh players, said Zhang.

While big foreign brands continued to reap big during the shopping festival, many domestic brands, especially in smartphones and apparel, are winning more consumers.

Services consumption is also rising. Door-to-door beauty care, luxury product maintenance and other services were popular on e-commerce platforms during this period.

Liu Qiao, dean of the Guanghua School of Management at Peking University, predicted services consumption to make up about 60 percent or more in China's total consumption by 2035.

Going digital 

As Chinese consumers' shopping preferences and habits are changing, brands, especially those in manufacturing, should innovate their production and operation to boost the supply chain efficiency, said Manny Maceda, worldwide managing partner of global consultancy Bain & Company.

AliResearch head Gao Hongbing said that digitalization is the way to gain deep understanding of consumers, develop tailored products and services, handle swarms of orders and ensure fast delivery and other post-sales services.

Via a big data platform that tracks real-time orders and inventory as well as an online-plus-offline retail strategy, domestic fashion brand PEACEBIRD raked in over 900 million yuan in sales on Nov 11.

Other than information technology (IT), digital technology (DT) will be a key infrastructure to enterprises' future success, Gao said.

Chinese firms' spending on digital transformation has expanded over a threshold by accounting for 51 percent of their total IT expenditure this year, a recent report by market intelligence firm IDC and Chinese IT company Inspur showed.

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