Bloomberg:
Boy, have we seen the reach of Singles’ Day stretch into weeks, even months. But are the numbers actually good when you adjust for the idea that it’s longer than in previous years?
Jacob Cooke:
We did a like-for-like comparison and we think it’s about 14.8% up over last year, which is much better than expected. We believe this is the strongest Singles’ Day since 2021. It ran a week earlier and continued a couple of days later, but even taking that into account, we’re pretty optimistic about the Chinese consumer right now.
Bloomberg:
Where is the Chinese consumer right now?
Jacob Cooke:
Middle-class growth has been pretty solid. Alibaba is now reporting numbers — especially with their 88VIP programme — that are also really strong, and that is focused on a more upscale consumer. They’re reporting about 30% growth in that category, which is impressive.
Middle-class consumers have been a concern for the past couple of years. There has been pressure on employment, but none of that really showed up as a drag during this year’s 11.11. It was a great result. We’re seeing close to 15% year-over-year growth for the world’s largest shopping festival, and those numbers are quite optimistic.
Bloomberg:
Are we in a position where we can look at all the Chinese technology companies involved in this and say that one specific company “won”?
Alibaba is the one I’m thinking about most, because in early October the shares hit their highest level since 2021. But from what I can see, there’s no tangible evidence that any one company did noticeably better or had more impact during this period.
Jacob Cooke:
It’s interesting. We think the destination platforms, rather than the social commerce platforms, performed better this year. So that’s JD and Alibaba. They’re showing much stronger growth compared with the Douyin (TikTok in China) and Xiaohonghu (RedNote) platforms.
Alibaba’s Business Advisor tool was particularly effective. It made operations a lot more efficient. Despite that 14.8% growth we’re estimating, ad-spend growth was much lower. Acquisition costs have come down. Alibaba is really improving efficiency in how brands find their customers.
What we expect as a result is that more ad budgets will shift away from Douyin and TikTok next year and move towards Alibaba’s platforms, which should further drive their growth.
Bloomberg:
What did you learn about the health of the Chinese economy?
Jacob Cooke:
This came in better than expected for us as well. We’re seeing solid growth. We also saw labour indicators improve recently. Salary levels and household incomes have been rising, so this wasn’t entirely unexpected.
If there was any remaining apprehension about the stability of the middle-class and upper-class consumer, it should ease now. We’re heading into a strong period for Chinese consumption. The government has supported spending through subsidies, so consumers are in a position to buy.
Bloomberg:
What are they buying: domestic brands or foreign brands? And what about the companies you advise that are trying to access Asia?
Jacob Cooke:
It’s a wide spread. When you look at the 88VIP segment and the middle- to upper-class consumer, you see more imported products driving growth. That’s a big part of what’s happening.
Local brands, particularly on Douyin and Pinduoduo, tend to target more price-sensitive shoppers. But a surprising trend this year came from Alibaba’s Business Advisor tool: we expected it to push prices down, but in some cases it actually recommended higher prices. That’s been good for margins.
Altogether, these factors suggest foreign brands will focus more on the China market next year, with expectations of both margin growth and top-line revenue growth.
Bloomberg:
Stephen Engle did a great wrap-up on how brands are using e-commerce, social media, and influencers.
How do you see AI and other technologies helping the brands you work with?
Jacob Cooke:
From being on the ground this year, operations were far more efficient. The event ran for a month, sales were spread across different categories, and that made it much easier to manage.
If you go back 10 years, Singles’ Day meant bringing your toothbrush and pillow to the office because you’d be there for 24 hours straight. This year, the preparation work, the AI tools, and the general operational support made it far smoother. Stress levels were lower. It was great for operators, and we expect these efficiencies to continue next year.
