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Economy

Singles Day records mask China's consumer jitters

Growing numbers 'eat earth' for months after bulk buying daily goods

Online retailers like JD.com beat record sales figures on this year's Singles Day, but consumers are increasingly using the event to stock up on household goods rather than indulge on luxuries.   © AP

DALIAN, China -- Despite another year of record Singles Day sales, China's consumer-spending boom appears to be waning, and people's buying habits reveal some less than healthy trends.

"I'll just have to 'eat earth' for the next six months," joked Sun Yuxin, a 25-year-old in Dalian who had spent 5,000 yuan ($720), roughly a month's salary, during the annual shopping event.

This year's November 11 sales once again showed the colossal size of China's consumer spending power. The combined gross merchandise volume of Alibaba Group Holding and JD.com, the country's two leading e-commerce players, during the event topped $53 billion.

But a closer look at the way people like Sun spent their money reveals a different picture.

Rather than splash out on clothes or gifts, she used the discounts to stock up on sundries like cosmetics and toilet paper.

"I didn't want to miss a great opportunity to buy these things at a discount. I have to get them anyway, right?"

With a monthly rent of 2,000 yuan, Sun gets by but cannot afford to save much, so dropping an entire paycheck in one day will not make things easy.

Many other people interviewed had similar stories, and used exactly the same expression. "Eating earth" means you are going to skimp on luxuries in order to spend later on.

In 2009, Alibaba took Singles Day, which had started as an alternative to Valentine's Day in the 1990s, and promoted it as an opportunity for people to splurge on gifts for themselves.

It has since grown into the world's largest shopping event, attracting retailers from across the globe. This year Alibaba managed sales of 213.5 billion yuan, while JD.com managed 159.8 billion yuan.

Sales disproved gloomy forecasts and grew on last year, albeit at a lower rate than before, highlighting the purchasing power of Chinese consumers and drawing a collective sigh of relief from executives at the e-commerce giants -- and in all probability some policymakers too.

But a buying frenzy on one day does not necessarily mean consumer fundamentals remain vibrant.

Sun will not be the only one "eating earth" for six months until the next big shopping event, the anniversary of JD.com's foundation on June 18, and repeating the cycle in the run-up to November.

While the e-commerce giants can boast record numbers on their big day, habits like this hardly indicate steady and healthy growth in consumer spending.

In fact, several factors signal a weakening appetite for buying. In October, year-on-year growth of total retail sales of consumer goods slowed to 8.6% from double-digit expansion in 2017, according to the National Bureau of Statistics. Overall box office sales in the month were down 30% from a year earlier, while new car sales dropped 12%.

With the U.S.-China trade war shaping up to be a drawn-out and damaging affair, consumer confidence looks set to be shaken further.

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