A bright or bleak Singles’ Day for Southeast Asia?

Indonesia-based 3Mongkis has low expectations for this year’s Singles’ Day.

The fashion brand, which sells mostly via Shopee and its offline stores, has participated in every 11.11 campaign since the pandemic. Its founder, Hetty Awi, thinks that the role of 11.11 has been diminished since there’s already similar twin-date campaigns happening every month like 9.9 or 10.10.

Photo credit: asphoto777 / 123RF

The downward trend in Singles’ Day has been occurring in its home country, China, since last year. Sales grew only 13% from 2020 to 2021, according to research firm Bain & Company.

In a survey conducted by the firm, nearly 34% of Chinese respondents said they expected to spend less on this year’s Singles’ Day, up 9% from 2021. Early reports out of China appear to confirm that consumers have to cut down on their online shopping significantly.

Amid this economic downturn, analysts are not expecting a stellar Singles’ Day performance in Southeast Asia either. However, they think that the 11.11 campaign remains important for merchants and brands to build up customer loyalty in the long run.

Rationalizing discounts

Southeast Asia is also feeling the pinch of a global ecommerce slowdown.

Gross merchandise value from the sector is now forecasted to hit US$211 billion in 2025, down from the previous estimate of US$234 billion, according to the latest e-Conomy SEA report from Google, Temasek, and Bain.

Roshan Raj, partner at RedSeer Strategy Consultants, says ecommerce players have to “rationalize” their discounts to eye future profitability.

The most notable example is Shopee, which has conducted a series of layoffs this year. In the second quarter of the year, Sea Group suffered losses of nearly US$1 billion and withdrew forecasts for Shopee.

As we previously analyzed here, Shopee has about one year to break even and it has significantly cut back on discounts and subsidies across markets. A veteran Shopee seller in Vietnam says the platform has cut nearly 50% of vouchers, so it’s hard to expect Singles’ Day to be as “explosive” as 2021. For the 11.11 campaign, he expects his sales on Shopee to decrease by about 40% compared to last year.

Another source from a major ecommerce marketplace also expects that most players will limit their cash burn in November and December.

“They [ecommerce firms] will still be all-out for 11.11 and 12.12 because there are targets to be achieved. But the promos and discounts will not be as aggressive as in previous years,” says the source.

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