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China’s Singles’ Day shopping event could disappoint
Inspired by the annual Black Friday sales event in the US, Singles’ Day began as a way for people in China to celebrate being single by treating themselves to gifts, but is now popular with consumers across the board.
Moreover, it no longer just takes place on 11 November but begins weeks before as shoppers ‘fill their carts’ hoping for big discounts on the day itself.
It has also spread beyond China to become a phenomenon across Southeast Asia. In countries such as Singapore and the Philippines, local online retailers Shopee and Lazada compete head-to-head with Alibaba and Amazon for a share of the spoils.
However, this year investor attention is likely to be focused on China says Chetan Seghal, co-manager of investment trust Templeton Emerging Markets (TEM), given the crackdown on tech companies and the drive to narrow the wealth gap in the economy.
‘Sales are likely to be more muted, with less hype and fewer discounts,’ says Seghal. ‘Consumer sentiment has been impacted by the economic slowdown, and everyone wants to conform,’ he adds.
Analysts will be watching closely the performance of big foreign brands like Apple, which is still highly regarded in China but faces growing local competition.
‘Chinese consumers are increasingly choosing local brands where quality is improving and companies can react quickly to changing tastes,’ notes Seghal.