China’s 11.11 Singles Day sales show signs of slowing as consumption growth lags behind

China's largest online shopping bonanza wraps up on today, with analysts and investors watching for signs that consumption is rebounding in the world's second-largest economy after recent efforts by Beijing to boost activity.

"Singles Day" -- launched by tech giant Alibaba in 2009 -- has ballooned into an annual blockbuster period for retail, with days of discounts luring customers to the country's online shopping platforms.

Its name is a riff on the four ones in its date of November 11, or "11.11" -- the tongue-in-cheek celebration of singlehood is a key driver of sales for Alibaba and its main competitor, JD.com.

Neither firm released detailed sales figures on last year's Singles Day for the second time running, with Alibaba saying only that it recorded growth during the period.

Sluggish domestic consumption is among the top issues now facing policymakers in China, which has struggled to achieve a full post-pandemic recovery.

This year's Singles Day could represent a major boon for retail giants as analysts watch for signs that recent measures are having an impact.

Analysts from the ING banking group said in a note last week that it expects to see "solid growth numbers" during the event, which it said "should comfortably outpace the overall consumption growth momentum".

Singles Day 2024 "is expected to generate over 1.2 trillion yuan ($167 billion)... representing a growth of 15 percent compared to the previous year", wrote VO2 Asia Pacific, a consultancy specialising in the digital economy.

While the promotional campaigns could be effective in driving short-term sales, managing partner Vincent Marion warned that the strategy could have negative repercussions.

"Many consumers buy in bulk to reach discount thresholds, only to return the products afterward," said Marion, warning that the practice "erodes profit margins and damages brand perception".

What is Singles Day?

Black Friday? No. Cyber Monday? Nope. Prime Day? Absolutely not. The world's biggest shopping event happens in China each year - and it's called Singles Day.

Originally a holiday to celebrate being single, as a counter to Valentine's Day, the event has grown into a weeks-long online shopping festival that peaks on November 11.

The idea for Singles Day had originated at China's Nanjing University back in 1993 and was originally called "Bachelor's Day." On the day, single people treat themselves with gifts and presents, while also organizing social gatherings and parties.

But growth has been slowing even as overall sales for Singles Day hit record highs, with last year's 3% rise marking the slowest increase ever. The event has in recent years lost some of its novelty with the rise of other shopping festivals in China, including the midyear "618" sales that are the country's second largest.