China Consumer

The view from the streets

We visit Hangzhou to see impact of Singles’ Day on city’s local malls

Jack Ma w

All bow to Alibaba’s Jack Ma

Regular readers of Week in China will know that in celebration of our 300th edition, we compiled a volume of 300 Chinese proverbs. One of them was the following: “So long as you have money, you can even hire ghosts to grind the millstone for you.”

In the celebrations to mark the onset of Singles’ Day, the Alibaba shopping extravaganza, Jack Ma proved the idiom by enlisting the help of two gweilos (a Cantonese term for foreigners that literally translates as “foreign ghosts”). British agent 007 (Daniel Craig) and Wang Qishan’s favourite American president, Frank Underwood (Kevin Spacey) both helped to launch the commercial festivities,with Craig appearing at Alibaba founder Ma’s side and Spacey starring in a video slot, purportedly from the Oval Office.

But while Alibaba can afford to hire ‘foreign ghosts’ on Singles’ Day, how are the traditional retail malls faring on what the online giant now calls the “11.11 Global Shopping Festival”?

WiC paid a visit to Hangzhou, Alibaba’s hometown, to see if the red-letter day for online retail has left traditional bricks-and-mortar stores out in the cold.

The first thing to note is that Singles’ Day is no longer a single day – at least not for those outside the Alibaba universe. Browsing Hangzhou’s high streets, it was not uncommon to see shops advertising extended sales periods leading up to and extending beyond November 11 itself.

At one of Hangzhou’s most popular shopping destinations – Intime Mall – the sales period ran from “11.11” until November 16. By the middle of Wednesday morning – Singles’ Day – there was a throng of shoppers outside the store, where workers were distributing flyers with further discounts. All the shoppers had to do was download the store’s app, scan a QR code and then enjoy a further 10% savings.

“You can even buy products on the app and then collect them in-store,” one sales assistant explained. Evidently, even the high street is learning how to embrace the smartphone.

Inside, business was brisk: customers streamed up the escalators and across the shopping floors. WiC questioned one group – as they waited to try on shoes – about why they had come to a store rather than gone online. “Online shopping is for the younger people,” a woman (who looked to be in her sixties) answered. “We prefer the interaction and activity of in-store shopping.”

Indeed, an unscientific survey of patrons in the mall confirmed that there weren’t many ‘youngsters’ there. Although, as a shop assistant commented, younger people might come later that day after work.

The group that were buying shoes further explained their preference: “It’s no good buying clothes and shoes online. You have to be able to see them, touch them, try them. You can’t do that online.”

But when it came to other types of products, Alibaba’s online extravaganza was clearly curtailing interest in some stores. Down the street at Gome – a major electronics retailer – staff outnumbered customers. Many of the escalators were even turned off. “We were actually busier yesterday evening,” one worker confessed. “A lot of customers come in just to compare prices, and then if they can find it cheaper online on Singles’ Day, they’ll buy it then.”

WiC’s tour of Hangzhou’s shopping districts didn’t lead us to the conclusion that sales at bricks-and-mortar outlets were dead-and-buried by the online challenge. Indeed, Alibaba’s own success – and its trickle-down effect in the city – may have created a greater volume of consumers. As one local resident explained: “Although the shops may now have a smaller slice of the cake, the cake itself has gotten bigger.”

As for Singles’ Day itself, on a nationwide basis it once again broke sales records, racking up purchases of Rmb91 billion over the 24 hour period (an increase of 60% versus last year). This led the Lex Column in the Financial Time to declare: “If China’s economy is meltiing down, its citizens are greeting the apocalypse by going shopping.”

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