What we can learn about luxury from China’s Singles’ Day

Has China finally emerged from recession? This year’s Singles’ Day shopping has exceeded expectations and could offer a glimmer of hope for the fashion industry.

Gone are the boom days when participating companies announced and celebrated explosive sales and profit data. But Singles’ Day 2024 wasn’t the craze that many feared. All platforms reported growth and high consumer engagement and attendance during the country’s largest annual retail festival.

Some e-commerce pre-sales events started as early as October 8th, increasing consumer fatigue and FOMO. But once again, it was China’s big technology companies that won. Alibaba Group announced that 45 brands had GMV sales of more than 1 billion yuan. One of them was Apple. There were 589 companies with gross merchandise value exceeding RMB 100 million, compared to only 402 companies last year, an increase of 46.5.

It comes as luxury goods groups report losses in China, fewer new market entries and dampening consumer sentiment. This is subject to change. McKinsey & Company’s November China Brief highlights a number of low-level indicators (from stimulus to real estate deals) that suggest consumption has gained some momentum in recent months.

While consolidating the 11.11 data, Nicholas Cano, director of U.S. and European business development for Alibaba’s Tmall Fashion & Luxury, was optimistic. Consumers spent “more than expected, despite the current negative sentiment of retail fatigue.” Kano said the company delivered solid results, setting new records in both sales and active buyers, once again proving China’s opportunities in the digital sector.

From October 14th to November 11th, overall trade remained steady, with men’s and women’s wear, sports and outdoor goods, and jewelry and accessories leading the overall market. The trends revealed a “shift in consumer values” and a growing demand for “premium, emotionally fulfilling and personalized products”. VIC’s average transaction price increased by 7% compared to last year, while consumers in lower tier cities almost doubled year-on-year and more than 60% were new customers.

Competitor JD.com posted double-digit year-over-year growth in transaction volume, orders, and users. Consumers increased by 20%. Over the course of the shopping festival, more than 16,000 brands achieved 300% year-on-year growth in transaction volume. The number of enterprises with sales exceeding 100 million yuan increased by more than 400% year-on-year, and the order volume of more than 17,000 merchants increased five times compared to the 2023 event.

Naturally, discounts are central to Singles’ Day. Jingdong Commercial City’s “10 billion yuan discount” program has expanded its product lineup more than four times compared to last year, attracting a large number of users. Virtual 50% off discounts on apparel drove a surge in fashion customers, doubling year-over-year transaction volume for more than 1,500 brands on the platform.

This trend is an ongoing problem for participating luxury homes. Despite typically relying on the Chinese market to clear seasonal inventory, Jack Roizen, managing director of China Consulting at DLG, expects to utilize these channels to the same extent as in the past. states that he refused. “This strategic choice allows us to develop a more sophisticated and qualitative brand image and provides a deeper understanding of the strategic role that our presence on Tmall and JD plays in a successful China strategy. It has become.”

That doesn’t mean luxury goods are excluded and some products were launched on Tmall during the festival. Valentino’s first collection by design director Alessandro Michele was unveiled on the first day of Tmall’s pre-sale. Embattled Burberry has released a special version of its classic logo scarf. Rising brand Miu Miu has premiered new colors of its IVY leather tote online.

Ferragamo has launched a velvet version of its ballet flats, and Amiri has released a new colorway of its famous Bone sneaker exclusively on Tmall. Max Mara’s classic cashmere coat, Lemaire’s croissant bag and Maison Margiela’s German trainers were among the best-selling items. The item that sold over 10 million units on Tmall on the first day of Double 11 was MCM’s Toni Visetos tote bag.

In fine jewelry, Cartier’s Love Series ring, Tiffany’s T Series Smile Necklace and Bvlgari’s Serpenti Forever Series bangles were the bestsellers in this category. A customer purchased a Fred Force 10 platinum diamond necklace worth RMB 470,000. In watches, the first high complication watch sold on Tmall was a gold Jaeger-LeCoultre Duomètre Spherotourbillon worth RMB 415,000.

Outdoor gear, lifestyle and activities surged, accounting for half of the top sales during the first phase of the event. This reflects a shift towards a healthier and more active lifestyle. Total transaction value in the outdoor sports category increased by 110% compared to last year. Companies like Decathlon, Mammut, Kolon, and Salomon all achieved impressive year-on-year growth ranging from 20% to 100%. Rapha opened its Tmall flagship store this year, making it number one in professional cycling apparel.

Fresh back from the Genius event in Shanghai, Moncler has launched a new Maile jacket exclusively on Tmall in limited edition colors of red, brown and beige. The Moncler

High-end beauty became the driving force behind growth. Tmall reported that sales of beauty products priced at RMB 500 ($69.14) and above increased by more than 200% year-on-year. A total of 79 beauty brands exceeded RMB 100 million in GMV. Chinese beauty company Proya has acquired 600,000 new VIP customers (known for their high spending power, visiting the platform more than 25 days a month and spending 9 times more than the average shopper) . Men’s grooming products in this price range also increased by 300%. Aromatherapy oils rose more than 1,000%.

Double 11 saw a 240% year-over-year increase in new product sales in the luxury home and dining categories. International brands such as Flos, Trudon and Artemide have all made their debut in the home sector. Designer and collectible toy brands such as Pop Mart, Jellycat, and MiHoYo have proliferated, with gross merchandise value exceeding RMB 100 million due to the rise of Millennials and Gen Z.

But as Roizen points out, GMV isn’t everything. Much of Singles’ Day is about promotions that can lead to “inflated GMV numbers that don’t translate into true net revenue growth and cost companies dearly.”

With that in mind, it’s clear that China’s e-commerce landscape, culminating in Singles’ Day, is an increasingly diverse and complex ecosystem. Jack Porteous, commercial director at Tong Global, says brands need to invest in “understanding their customers and building long-term brand value.” Flavors are rapidly evolving and competition is fierce. “They can’t simply rely on the shopping festival merry-go-round to deliver consistent growth.”

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