Chinese consumers could splurge on foreign imported products on Alibaba’s Singles Day 2020, according to a senior Alibaba executive.
Alvin Liu, the president of Alibaba’s Tmall import and export business, suggests that most shoppers will not be shopping outside mainland China due to the coronavirus pandemic so they may opt to buy foreign goods during Alibaba's Singles Day 2020.
Chinese shoppers who would have typically purchased foreign brands during their holidays abroad are resorting to online shopping, he said.
Consumers can buy imported items on Tmall, Alibaba’s main platform in China. Alibaba is preparing for Singles Day, the annual 24-hour online shopping event that will happen on Nov. 11 where billions of dollars of items are bought on Alibaba’s platform.
“I think the import product will have ... big business this year for Singles Day,” Liu said during an interview with CNBC on Friday.
“As you know there is no global travel, so Chinese people stay within mainland China but they still prefer to buy all kinds of high-quality products overseas. I think Singles Day is the best timing for them to buy a lot of things.”
Singles Day, also known as Double 11, is when Chinese e-commerce firms from Alibaba to JD.com offer large discounts over a 24-hour window. Gross merchandise value, a figure that discloses sales across Alibaba’s shopping channels, reached 268.4 billion yuan or about $40 billion last year.
For 2020, the Chinese e-commerce giant is aiming to boost the participation of foreign brands. Tmall will be delivering 2,600 new overseas brands to China for the first time, Alibaba said.
Local brands on Alibaba’s Singles Day 2020
However, even with the campaign for foreign brands, Chinese consumers could be opting for domestic items instead, as suggested by a recent survey from AlixPartners.
Findings revealed that 66% of Chinese shoppers said that they will be buying domestic brands instead of foreign ones. Meanwhile, a third mentioned “patriotism” as their reason for purchasing local products. The survey also shows that 57% of Chinese shoppers will spend less on American items this year.
Liu did not agree with those findings and claimed that this is unlikely to happen. He stressed that Chinese shoppers still look for high-quality foreign products.
“I think there is no big change ... so we see the Chinese consumers still prefer to buy all kinds of products from the whole world. For sure, (the) U.S. is still one choice for them and we also see huge demand for U.S. — all kinds of categories ... for example healthcare, supplement, food and the beauty products,” Liu told CNBC.
However, he stressed that there were new brands coming to Tmall that come from mainland China.
Alibaba's hypermarket investment
Aside from the Singles Day, Alibaba is also preoccupied with its investment in a hypermarket.
In October, Aliabba announced its decision to purchase a controlling share in the country’s largest hypermarket network, Sun Art.
According to Nikkei Asia Review, the Alibaba Group Holding will grow its stake in Sun Art to around 72%. The Chinese e-commerce giant will buy a majority share of A-RT Retail from France’s Auchan Retail. A-RT Retail owns a majority stake in Sun Art.
The Sun Art network runs 486 outlets, and Alibaba’s purchase is considered as an extension of its “New Retail” strategy. Alibaba aims to merge online and offline operations, from supply chain to logistics.
CEO and Chairman Daniel Zhang, who leads the strategy, explains that the pandemic has spurred the rise of online grocery in China.
“As the COVID-19 pandemic is accelerating the digitization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our new retail vision and serve more consumers with a fully integrated experience,” Zhang said in a statement.
