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- Nearly 40 per cent of respondents say their budgets for this year’s online shopping festival are down 30 per cent, a new survey shows
- Chinese consumers say they want to save more because they are worried about the economy, including inflation and the job market
More than half of consumers have tightened their shopping budget for the coming Singles’ Day shopping frenzy, according to a new survey, dealing a potential blow to Beijing’s assurance that consumption should remain a key driver of China’s economic recovery.
According to a survey conducted by China Newsweek magazine, nearly 40 per cent of the more than 2,300 respondents said their budgets for the online shopping festival were down by 30 per cent on last year, while only 15 per cent said they plan to spend more.
Lydia Xi, a 28-year-old working in Jinan, the capital of Shandong province, said she will only buy necessities during the festival, as the coronavirus pandemic has made her adopt a more cautious attitude towards shopping.
“It’s hard to make money these days, especially with the ongoing inflation,” she said.
“I plan to only buy what is absolutely necessary this year and won’t stock up on skincare products any more."
Her salary at the foreign trade company she works for is still about a fifth below what she earned before the pandemic, and she plans to save more to feel more secure.
Held on November 11 every year, the annual shopping spree in China is the world’s largest online shopping festival and seen by many investors as a proxy for consumer spending in the country, as well as an important barometer for economic health.
Premier Li Keqiang urged last week during a state council meeting that China should continue stabilising the economy while boosting consumer demand.
But that may be harder said than done, according to the survey results released on Saturday. Despite 70 per cent of the respondents planning to participate in the shopping frenzy, nearly 70 per cent of consumers have a budget of under 2,000 yuan (US$273).
Expectations for this year’s event are not as buoyant as previous years, reflecting the state of China’s slowing economy, the disruptions caused by Beijing’s zero-Covid policy and the impact of regulatory crackdowns on the e-commerce industry.
Despite raking in 540.3 billion yuan (US$74.4 billion) in gross merchandise value – beating turnover in 2020 – Alibaba’s Singles’ Day sales last year grew at their slowest rate since the company’s first campaign in 2009. Alibaba is the owner of the South China Morning Post.
Tang Xiaoning, a 28-year-old from Nanjing working for an internet company, said he also needed to save money amid a slowing economy.
He still plans to buy a fair amount of necessities, but will replace the more expensive foreign brands with more affordable domestic ones to cut spending.
Who knows when I will be out of a job in the current day and ageTang Xiaoning
“The domestic substitute would save about half of the money, and I am cutting as much as I could [from the shopping trolley] if I don’t absolutely need them,” Tang said.
“Who knows when I will be out of a job in the current day and age, saving more money gives me a sense of security, and there’s nothing else I could do.”
Overall, business sentiment remains bleak, with the official non-manufacturing purchasing managers’ index falling in October for the first time since May, dropping to 48.7 from 50.6 in September, according to data released on Monday.
The service sector has been the worst hit by the coronavirus and continues to feel the impact, according to Erin Xin, Greater China economist at HSBC.
“The softer overall activity also played into further labour market pressure,” she said.
“The impact was broad-based as both the manufacturing and non-manufacturing employment indices fell further. A deteriorating labour market can put downward pressure on the consumption recovery leading to lost income and increased precautionary savings.
“The September unemployment rate picked up for the first time since April, to 5.5 per cent. Thus, it becomes imperative for policymakers to provide more support to stabilise growth.
As business expectations dim, building back confidence will be key for an economic rebound and it will be important for policymakers to continue to offer supportive measures to shore up growth and to boost consumption, she added.
