/Behind the consumption frenzy, Singles’ Day revenue numbers may be a bubble

Behind the consumption frenzy, Singles’ Day revenue numbers may be a bubble

There are eight days to go before November 11 arrives, yet China’s Singles Day, AKA Double 11 shopping festival, has already begun. Subways, elevators, and video-streaming apps… every possible space is plastered with ads and posters for this year’s Singles Day shopping festival.

Despite all the hype about super sales, Chinese authorities have started to set up inspections to ban exaggerated ads, detect fake goods, and to stop possible online frauds during this festival.

Exaggerated ads vs. revenue miracles

According to Shen Danyang, spokesman from China’s Ministry of Commerce, Chinese authorities have studied problems that are likely to arise in online retailers’ ways of marketing.

The Jiangsu Provincial Administration of Industry & Commerce also talked with a dozen e-commerce platforms on Wednesday, asking them to abide by the rules, and publish information with true data that can be verified. Additionally, the platforms were asked to do their part to prevent the spread of false information.

It has become a no holds barred fight, where e-commerce platforms try to push up their sales volume by all means necessary. Last year’s shopping festival, Alibaba claimed that its e-commerce arm Tmall had made RMB 91.2 billion (USD 14.3 billion) in revenue, three times higher than the USD 4.47 billion Black Friday revenue in America.

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Left: Carnival City | Right: A “red envelope” catching game

Tmall’s sales volume last year was calculated by the second. The Double 11 shopping festival started with a grand beginning, producing RMB 100 million in 18 seconds. It soon soared to RMB one billion at one minute and 12 seconds.

Watch out for the hook

Feeding the shopping craziness of herds of consumers with discounts and benefits, Double 11 for the past seven years was, unfortunately, a wonderland not only for consumers, but also for swindlers. Cheaters would easily fish for buyers with fraudulent bait.

Although forged and fake products have been a long-term issue, Double 11 is peak season for deceptive pricing and misleading ads. To use a basic example: you spotted a gorgeous dress that costs RMB 700, you saved it to the shopping basket, deciding to purchase it during Double 11 when it is less expensive. During Double 11, you revisit the dress, and see that indeed you can get a 30% discount – but its nominal price has been altered to RMB 1,000.

Other than luring consumers with false discounts, deeds that deserve punishment also include using discounts as an excuse to dispatch products of inferior quality, recruiting ghost buyers to write five-star product reviews, and disappearing after products are sold regardless of consumers’ needs in after-sales service.

Every e-commerce platform has a carnival

The race among e-commerce platforms led to the supper discounts and sales moves. What’s special during this Double 11?

The Tmall app has a section named “Global Carnival” on its front page. Here, users can enter “the carnival city” to win coupons with a total value of RMB 170 million (USD 25 million). By visiting the “mansion” of different brands, you get chances of playing various games; if you win, you win coupons that can be used on the day of the festival.

Tmall this year invites shoppers to a virtual reality shopping experience, and views products of different categories that are recommended through artificial intelligence. Scores of discounts are offered outside of “the city of the carnival” as well – only be aware that these coupons are offered to make you spend even more!

JD.com also has a carnival. Until November 12th, every day has five rounds of “flash sales”, each offering 10 products at surprisingly low prices for a limited period of time. Some products even claim to be sold for free. For example – in a case confirmed by some buyers in the product review – buying a router priced at RMB 379, after which RMB 379 will be refunded post-purchase.

JD.com has games as well. In one game called “Open the Treasure Box”, you get to find five treasure boxes on a map in exchange for a coupon for most of the products on JD.com.

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JD.com’s games for Double 11

Other platforms, such as Sunning and Ele.me are not lagging behind either, with coupons to be offered in multiple ways. A brief introduction here can by no means cover all there is to explore.

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Left: Sunning’s game for winning coupons | Right: Coupons to be gained at Ele.me

Let’s wait and see this year’s Double 11’s new sales record.

(Top photo from Pixabay.com)

Ke graduated from the University of Edinburgh with a Master's Degree in English and has worked on projects with Ipsos MORI and SDI Media. She's particularly intrigued by China's thriving technology scene and is eager to write about this flourishing industry.