China's online shopping platform Alibaba recorded its slowest growth in sales for the Singles' Day shopping extravaganza this year, as the e-commerce giant comes under increasing pressure from the Chinese government.
Alibaba reported yesterday that it pulled in a record 540.3 billion yuan (S$114.6 billion) in sales, or gross merchandise value, over the 11-day event which ended on Thursday. But this year's figure is a mere 8.4 per cent higher than 2020's.
Last year, sales almost doubled compared with 2019, as Alibaba stretched the single-day event to 11 days.
Since Alibaba launched the festival in 2009, it has become the world's biggest online shopping event, with sales in China growing by double digits every year until this year.
Alibaba's rival, JD.com, performed better but it also logged slower sales growth, with 349.1 billion yuan in sales, 28.5 per cent higher than in 2020, when it reported a 32.8 per cent rise in sales.
The event is closely watched as a barometer of Chinese consumer sentiment. But analysts say momentum at the shopping festival is dropping because of slowing economic growth and the government's ongoing crackdown on technology firms.
"It's a reflection of how consumption in China is weakening, and this is not just brick-and-mortar consumption but also online sales," said Ms Alicia Garcia Herrero, chief economist for the Asia-Pacific region at Natixis.
Beijing has been placing e-commerce firms under increasing scrutiny over anti-competitive behaviour. Alibaba was fined 18.2 billion yuan earlier this year for monopolistic behaviour, and platforms were also warned by the authorities against unfair pricing.
Ms Herrero pointed out that, moving forward, platforms will have to be careful about "the margins they get and this will slow down the business for sure".
Also a factor is Chinese President Xi Jinping's new "common prosperity" drive, which seeks to narrow the wealth gap, but could also dampen demand for luxury products.
Capital Economics chief Asia economist Mark Williams said consumers were probably "feeling a little more sober this year with the promotion of common prosperity by the media".
"And retailers probably don't want to be seen to be encouraging excessive consumerism," Mr Williams added.
Unlike previous years, this year's shopping festival seemed to be a more muted affair, with e-commerce platforms not reporting rolling tallies of sales figures - a break from past practice.
The state-backed Securities Daily newspaper had blasted the focus on turnover figures as being unsustainable and incompatible with the country's development path.
"The 'worship of turnover' is not only unsustainable in terms of digital growth but is also inextricably linked to chaos," said the newspaper.
