CHINA TOPIX

Updated 9:12 AM EST, Tue, Jan 05, 2021

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China’s Singles Day: One in Four Sales Returned

11.11 China's Singles Day

(Photo : Southcn.com) China’s Singles Day Sale gross merchandise value reached RMB 57.1 billion ($9.3 billion). However, not all of those sales were legit.

China's Singles Day Sale was reported as a bonanza for the economy as merchandise value reached RMB 57.1 billion ($9.3 billion). However, as it turns out that prosperity wasn't quite accurate as many companies were reportedly overinflating their numbers with fake orders. They artificially boosted their transaction volume by having buying agents purchase their own products.

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There was a list of numbers showing the promotion event's success on Alibaba's online shopping platform, TMALL.com: RMB 1 billion ($163 million) in 3 minutes; RMB 3 billion ($490 million) in 8 minutes; RMB 10 billion (1.63 billion) in 38 minutes. What wasn't show - at least not right away - was that in the next few minutes, more than a few people said that they could not pay successfully due to the busy Alipay system.

Economic observers say that some merchants regard the Singles Day as a beneficial chance to promote their brands while some merchants look it as a golden opportunity to clear out of stocks and to break sales volume record.

Xu Jun, global partner of Strategy &, a global management consulting services company, says "theoretically, if consumers purchase some products only when there are 50 percent off, it means either they are not the target consumers of the brand or the brands are over pricing. So it is crucial to keep a balance. The operation is unsound if many brands online sales are to depend on Singles Day (covering 50% of online sales volume)."

Even though the gross merchandise value reached a new high this year, impure purpose and over-stress price make the goods at the Singles Day regarded as "inferior products." According to the data from China Industry Research Network's website, the Singles Day's return rate of Tmall.com in 2013 reached 25%. The rate of partial merchants were as high as 40%.

On November 5, General Administration of Quality Supervision, Inspection and Quarantine of China extracted 502 batches of electronic commerce products from 359 companies on the e-commerce platforms including Tmall, JD, Amazon, Dangdang, YHD, Vancl. The passing rate is 73.9%, and 131 batches of the products is inspected to be unqualified. The unqualified rates of 7 kinds of the products are over 30%. The highest unqualified rate is leather shoes', reaching 56.3%. Plush toys' unqualified rate is 40% with many hidden dangers.

It is important for Chinese small brands or merchants to establish it outstanding brand image through pictures and text descriptions online and win in the cruel e-commerce competition. 

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