Price wars during Chinese shopping fest expose consumer woes
By Sophie Yu and Casey Hall
BEIJING (Reuters) — A ferocious price war among China's e-commerce retailers during the «Singles Day» shopping event is exposing further weakness in household consumption and raising concerns that the world's second-largest economy will resume its slowdown.
Originally a 24-hour online shopping event in China held on Nov. 11, Singles Day, a nod to the digits in the date, has expanded into weeks of promotions, including in brick-and-mortar stores, making it the world's largest shopping festival.
This year's festival is being more closely watched than ever as a gauge of consumer confidence as China flirts with deflation and has identified boosting household demand as key to avoiding lost decades of sluggish growth.
On Taobao and Tmall, platforms owned by e-commerce giant Alibaba (NYSE:BABA), consumers can receive a 50 yuan ($6.86) discount when they spend 300 yuan. The company is pressuring merchants to offer rock-bottom prices during Singles Day after promising it will offer 80 million products at their lowest prices this year for the sale, which started in late October.
PDD Holdings' Pinduoduo (NASDAQ:PDD) and JD (NASDAQ:JD).com have between them indicated they would offer billions in cashback deals over the sales period for people shopping on their respective platforms.
«Low prices and discounts has been the overarching theme,» said Jason Yu, greater China managing director of market research firm Kantar Worldpanel, noting that even the newly-released iPhone 15 was selling with a 500 yuan discount.
«It's a sign that nobody's going to easily spend 10,000 yuan ($1,371) on a handset right now. Confidence is a bit weak.»
Data released on Thursday showing a drop in consumer prices to their
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