Alibaba Group Holdings is set to end China’s Singles Day with muted sales, recording a 4.7% drop in sales for the first 12 hours of the event’s last day.
The Singles Day shopping festival, a key barometer of Chinese retail demand, was hit hard by China’s slowing economy and strict Covid curbs.
Although Alibaba said that it would offer 17 million products, which was 3 million above last year, expectations were still set that this would be the weakest year for Alibaba’s GMV growth.
According to an analyst, “While promotional campaigns have kicked off with decent buzz on consumer demand over the past week, we are cautious; spending sentiment is likely to remain soft.”
Analyst forecast only 0.9% to 3.6% growth this year, which was below compared to the 8.5% increase last year and a whopping 26% spike in 2020 when the festival was only a one-day event.
Singles Day Without a Celebrity-packed Gala
The e-commerce giant also did not hold its usual celebrity-packed gala in an effort to play down the hype in light of Chinese President Xi Jinping’s strong emphasis on “common prosperity.”
Viya, China’s top commerce live streamer who sold more than $1 billion in products last year, was missing from the festival this year after being fined $210 million for tax evasion.
Also missing is Li Jiaqi, another top streamer who was caught in a scandal in one of his livestreams on June 4.
These scandals involving online celebrities led to a trend of using virtual influencers, people who use computer-generated characters, to attract customers.
“It’s really risk control, as in the past few years a lot of celebrities have been caught in some scandals,” an analyst noted.
CEO of WPIC, Jacob Cooke, also commented, “It’s obviously a lot more cost-effective than giving Li Jiaqi a 30% commission.”
This is the first year that Alibaba didn’t hold a celebrity gala show, which previously featured international stars such as Mariah Carey and Taylor swift. According to the e-commerce company, the cancellations were partly a result of China’s Covid curbs.
