Finance
How China’s consumers are spending this Singles Day shopping festival
Employees package and sort express parcels at an e-commerce company on Nov. 1, 2024, around the Double 11 Shopping Festival in Lianyungang, Jiangsu Province of China.
Vcg | Visual China Group | Getty Images
BEIJING — Early indicators of China’s biggest shopping event of the year reveal a pickup in select categories amid expectations of relatively modest growth in overall sales.
China’s version of Black Friday kicked off on Oct. 14, more than a week earlier than last year, as e-commerce players Alibaba and JD.com grapple with tepid consumer spending. The shopping festival, also known as Singles Day or 11.11, has in recent years evolved into a weeks-long promotional period since Alibaba launched it in 2008 on Nov. 11.
“What we’re seeing so far, it’s going to be slightly better in terms of GMV growth over last year,” Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC Thursday. The company helps foreign brands — such as Vitamix and IS Clinical — sell online in China and other parts of Asia.
GMV refers to gross merchandise value, an industry measure of sales over time. China’s e-commerce giants stopped reporting Singles Day GMV in 2022 during the pandemic. In 2021, Alibaba said its GMV rose by 8% while JD’s climbed by 28%, totaling more than $139 billion.
Singles Day GMV this year as of Oct. 30 was 845 billion yuan ($119.1 billion), according to research firm Syntun. It was not clear how the GMV figures compared to 2023 given the extended promotional period this year.
Around 80%, or roughly $95 billion, came from Alibaba, JD.com and PDD, while nearly 20% was generated via livestreaming sales platforms Kuaishou and ByteDance’s Douyin, the Syntun report showed.
While Singles Day GMV no longer grows by 30%, Cooke said he expects around 15% growth this year, better than the 11% increase in 2023, when the festival lasted for 19 days, according to his company’s data.
“Things that are experiential-based are starting to do really well, less on the Louis Vuitton luxury and more on the lululemon is kind of what we’ve said about this for a while,” Cooke said. “It’s just that consumer habits have really changed.”
Subsidies boost appliances
Helping boost sales this Singles Day are China’s subsidies for trade-ins of home appliances, launched in late July. Chinese authorities since late September have started doubling down on stimulus efforts by cutting rates on existing mortgages and signaling further support.
“We believe [the] 11.11 festival this year will be a critical point and is poised to reflect on the recovery trajectory in 3Q24 and 4Q24,” analysts at UOB Kay Hian said in a report.
They predict 4% to 5% growth in Singles Day GMV, with sales in the home appliance category supported by the trade-in program.
Alibaba said government subsidies and platform benefits contributed to a more than seven-fold surge in presales of home appliances during the first hour on Oct. 14, compared with the first hour of presales last year.
JD.com said that between Oct. 14 and Oct. 31, transaction volume grew by double-digits versus the same period a year ago. The company claimed record sales in consumer electronics and home appliances, without disclosing figures.
“This year, it seems that the price war of e-commerce platforms has slowed down overall, returning to a certain degree of rationality after the intense price competition,” Dave Xie, partner at Oliver Wyman, said in a statement. He also noted Beijing’s stimulus announcements and a recovery in consumer sentiment.
“In the initial phase of Singles Day, categories such as home appliances and consumer electronics, outdoor gear, beauty and cosmetics, and pet supplies have all performed well,” Xie said.
‘Micro’ shopping trend
A consumer trend that’s emerged this year is in toys and collectibles, often from a game or popular animated series. The category is usually referred to as IP in China.
”A lot of international brands have been fighting for licenses to try to get in here and do this as well,” Cooke said.
There’s always “a micro trend in every year’s 11.11 and this really seems to be it this year,” he said. “Something that kind of came out of nowhere, into all of a sudden really, really big numbers.”
More than 100,000 products based on licenses for over 1,000 characters — such as the games 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. Products include collectable cards, figurines and clothes.
The category also includes Lego and British toy company Jellycat, which launched a Valentine’s Day plush dog in China for Singles Day, Liang said. The 7,000 dogs, priced at around $50 each, sold out in seconds, she said.
Japanese manga Chiikawa opened a Tmall store in late September, and saw more than 100,000 shoppers simultaneously order a $9.72 limited edition plush, Liang said.
Liang said Taobao and Tmall started developing the IP category in 2017, and elevated it in 2021 to one of its few tier-one segments in terms of product promotion and business priority. She said most buyers are in their early thirties or younger, and prefer to spend on products perceived as bringing happiness or other emotional satisfaction.
Sentiment is ‘much calmer’
Despite such pockets of growth, China’s Singles Day remains more toned down than in prior years.
“Sentiment is quite different this year, much calmer,” wrote Ashley Dudarenok, founder of ChoZan, a China marketing consultancy. “Chinese consumers are not caught up in the ‘buy buy buy frenzy,’ they are hunting [for] more expensive products that they actually need vs just lower prices.”
She expects that at best, Singles Day this year may be “slightly better” and driven by different categories.
The shopping promotions officially wrap up on Nov. 11.
James Yang, head of Greater China retail at consultancy Bain & Company, said the firm has “muted expectations” for Singles Day this year, continuing the trend of the last two years.
JD is set to release quarterly results on Nov. 14, while Alibaba is scheduled to release earnings on Nov. 15.
The bitcoin rally is generating a false sense of security among investors, according to the strategist behind the so-called granddaddy of gold exchange-traded funds.
State Street Global Advisors’ George Milling-Stanley warns cryptocurrency plays don’t offer the stability of gold.
“Bitcoin, pure and simple, it’s a return play, and I think that people have been jumping onto the return plays,” the firm’s chief gold strategist said on CNBC’s “ETF Edge” this week.
Milling-Stanley’s comments came as his firm’s SPDR Gold Shares ETF (GLD) celebrated its 20-year anniversary this week. It is the world’s largest physically backed gold ETF, and it’s up more than 30% in 2024.
“Gold was $450 an ounce [20 years ago],” said Milling-Stanley. “It’s now five times what that price was then. If you look at a five-times price, then gold should be somewhere over $100,000 in twenty years’ time.”
Gold just had its best weekly performance since March 2023. Gold futures settled at $2,712.20 on Friday, the highest settle since Nov. 5. Gold prices are now just 3% below the record high hit on Oct. 30.
Bitcoin, which has surged since the Nov. 5 election, is having a banner year, too. It hit an all-time high on Friday.
Milling-Stanley thinks investors who treasure gold’s safety qualities should reconsider piling into bitcoin. He suggests the crypto world is trying to manipulate them.
“This is why they [bitcoin promoters] called it mining. There’s no mining involved. This is a computer operation, pure and simple,” he said. “But they called it mining because they wanted to seem like gold — maybe take some of the aura away from the gold.”
Yet, he acknowledges it is unclear how high the yellow metal can actually go.
“I have no idea what’s going to happen over the next 20 years except it’s going to be a fun ride,” Milling-Stanley said. “I think that gold is going to do well.”
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Americans are retiring at a record-setting pace amid the aging of the baby boomer generation, and exchange-traded funds (ETFs) have become a popular way for retirees to invest in ways that align with their risk tolerance and diversification needs.
A recent report by the Alliance for Lifetime Income found that about 4.1 million Americans are projected to turn 65 on an annual basis from 2024 through 2025. That has pushed the number of Americans turning 65 each day from roughly 10,000 in the past decade to more than 11,200 this year.
ETFs can offer investors access to a variety of investment themes of interest to retirees, from equity ETFs optimized for dividend yields to bond ETFs yielding interest on government and corporate debt, as well as those modeled on broader indices like the S&P 500 or that have international exposure. Some can also include built-in hedging strategies to guard against downside risk.
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“Investments are personal, and the ‘best’ ETFs for someone in or near retirement can vary widely, depending on their situation. Those in or near retirement should evaluate their situation in terms of their overall allocation, the time horizon for drawing down or growing their assets, and what level of risk they’re comfortable with,” said Lawrence Sprung, CFP and founder of Mitlin Financial.
Retirees can use ETFs to deliver income in retirement by targeting dividend or interest-paying ETFs, or use them to diversify their portfolios. (iStock / iStock)
“Investors that have a higher risk level and longer time horizon will be included to invest in more growth-oriented ETFs. On the other hand, investors who require income today from these assets with a lower risk tolerance will have their portfolios allocated more toward income-oriented investments,” Sprung added. “The ETFs that may be best for one investor may not be the best for another.”
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ETFs can be broadly diversified or may be narrowly focused on a certain part of the market. (Angela Weiss / AFP for Getty Images / Getty Images)
Some ETFs offer retirees and future retirees some downside risk protection, said Faron Daugs, the CEO of Harrison Wallace Financial Group.
“Often, these are referred to as buffered ETFs. They are generally tied to a stock market index and have various downside percentage protection in the event of a downturn in the market,” he said. “This type of ETF allows you to participate in potential growth opportunities but offers individuals a little bit of a parachute in the event of a downturn.”
“Another option to consider would be an ETF that invests in dividend-producing stocks. Typically, having a portfolio can generate you a return via a dividend, regardless of the stock performance, can serve as an attractive way to gain some growth potential and offer potential for return in some form – even if the price of the stock declines,” Daugs added.
ETFs can help investors diversify their portfolios by targeting specific types of assets more efficiently. (iStock / iStock)
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If a retiree needs income during their golden years, an ETF that pays dividends or interest can be a wise investment, said Ted Jenkin, co-founder and consultant at oXYGen Financial.
“SPDR Portfolio S&P 500 High Dividend ETF (SPYD), Vanguard Dividend Appreciation Index Fund ETF Shares (VIG) and iShares Select Dividend ETF (DVY) are just a few to look at,” he said.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SPYD | SPDR® PORTFOLIO S&P 500® HIGH DIVIDEND ETF – USD DIS | 46.40 | +0.53 | +1.16% |
| VIG | VANGUARD SPECIALIZED FUNDS DIVIDEND APPRECIATION ETF | 201.00 | +2.26 | +1.14% |
| DIVY | TIDAL ETF TRUST SOUND EQUITY DIV INC ETF | 26.88 | +0.11 | +0.40% |
Jared Levy, chief markets strategist at Peak American Financial, said that investors should be “extremely precise the closer they get to retirement” because they typically are shifting from “prioritizing growth to prioritizing protection.” Levy added that it’s “critical to have an all-weather portfolio that is not only balanced for your risk tolerance, but one that doesn’t become correlated if things start to fall apart.”
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He said that one of his firm’s all-weather portfolios features the Protected S&P 500 ETF (BUFR) along with a mix of corporate and Treasury bond ETFs; bitcoin, gold and precious metal ETFs, a small-cap ETF based on the Russell 2000 and other investment instruments.
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