COVID-19 To Have Little Impact On China's Singles-Day Shopping Frenzy

SHANGHAI, November 6, 2020 – A new Oliver Wyman survey has found that at this year’s Singles Day shopping festival, 86 percent of Chinese consumers are willing to spend the same as or more than what they did last year, indicating a further consumption recovery since COVID-19. While attractive discounts remain the top draw, imported goods seem to be losing their appeal among Chinese consumers. Moreover, livestreaming and short videos, the big phenomenon of the year, still have a long way to go to convince all consumers.

According to the survey, 48 percent of the consumers plan to increase their spending. Of this proportion, more than half said it is driven by more discounts and better choices of brands, while 39 percent said they simply have more money to spend post-COVID. On the other side of the coin, 14 percent of the respondents said they would spend less than last year, half of them because they were financially impacted by the pandemic.

Surprisingly, Chinese consumers’ appetites for imported goods during Singles Day is expected to diminish this year, with only 44 percent of respondents saying they are going to buy imported goods, down from 60 percent last year. While baby care, healthcare, and cosmetics/skincare remain the three most popular categories for overseas purchases, the overall interest decreased from above 60 percent last year to around 40 this year.

“China’s appetite for consumer goods under steroids post-COVID, continues to amaze the rest of the world,” said Jacques Penhirin, the Oliver Wyman Partner who led the survey. “We look forward to another record sales year. However, not everyone will win – 14 percent of consumers feel that COVID-19 has brought too much uncertainty to be take advantage of the crazy deals. Other losers may be imported brands, which beyond beauty where they continue to lead the pack, have lost momentum.”

The survey has also investigated consumers’ opinions towards not only rising players but also new approaches, such as social e-commerce, livestreaming, and short videos.

Traditional e-commerce giants, such as Tmall, Taobao, and JD.com, will still dominate the event, with an expected penetration rate of more than 80 percent. Social e-commerce platforms, such as Pinduoduo, Red, and WeChat stores, are now serious alternatives for consumers. Among them, Pinduoduo takes the largest share, with 55 percent of the respondents saying they would buy from this platform.

Meanwhile, people have polarizing views with regard to livestreaming and short-video sales. Half of the surveyed consumers think the content is too boring, and they also have concerns over fraud and exaggerated marketing. The other half, however, think they can get better discounts from these types of sales platforms.

“For brands and retailers, livestreaming is a headache as well as an opportunity. On the financial front, the top KOLs are demanding high commissions from brands. High commissions combined with deep discounts hurt the profitability of brands. On the operational front, meanwhile, there is an ever-increasing sales concentration on only a few hero products (“爆品”, or “Bao Pin” in Pinyin) featured via livestreaming, and this can create a supply chain issue that not every brand is ready to handle,” said Pedro Yip, Partner and the Head of Retail and Consumer Goods in Greater China at Oliver Wyman.

About the survey
The online questionnaire was fielded in the Chinese mainland in October 2020. Oliver Wyman surveyed 1,000 online shoppers from tier 1 to 3 cities, including but not limited to Beijing, Shanghai, Nanjing, Weihai, Chengdu, and Urumqi, asking them about their shopping preferences during the upcoming Singles Day shopping festival. Of the 1,000 individuals surveyed, 39 percent have a monthly income between RMB2,000 and RMB5,000, and 40 percent earn between RMB5,000 and RMB20,000. Most of the respondents are aged from 20 to 49.

About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 29 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh & McLennan Companies [NYSE:MMC]. For more information, visit oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.