3,000km . . . is the combined length of bargain-price underpants (if laid end-to-end) sold on Chinese websites between midnight on Sunday and 1am on Monday morning. If all the cut-price bras sold in the same period were piled on top of one another, the resulting pillar of lingerie would be three times the height of Mount Everest.
In those first, financially incontinent 60 minutes of Monday morning, China’s largest handler of online payments took 25 million orders with a combined value of 6.7 billion yuan (£686 million). About 340,000 of those orders were placed in the first minute. It was as if the world were about to end and China suddenly decided that the only hope of salvation lay in half-price knickers.
Astounding numbers of this sort were in plentiful supply on Monday as China delighted in the mad calculus of consumerism. It looks heartily encouraging, but appearances are deceptive. The cause of the online shopping frenzy was a deluge of sales promotions timed to coincide with “Singles Day” — a magnificently contrived “festival” prompted by the date 11.11. The whole thing was invented only four years ago.
Every online retailer in China (and there are an awful lot of them) was slashing prices as part of the fun. By mid-afternoon of Singles Day, the Alibaba online portal said that its sales promotions had generated more than ten billion yuan. That is already more than total online sales in the United States last year on “Black Friday”, the shopping day that follows Thanksgiving and historically is the biggest day for retail in the American calendar.
The temptation is to treat Singles Day as a bellwether, both of the general strength of online retail and of the ability of China’s nascent consumer economy to concoct its own events from thin air and convince people the best way of celebrating them is by shopping.
The reality, though, is less cut and dried. Taobao, the online shopping mall that enjoyed such fantastic sales on Monday, has another internet retail division that is telling a rather different story. For some months now, various courts in China have created online stores on Taobao to conduct what they call “judicial auctions” — sales of the various goods seized by the courts in criminal cases. The Government’s crackdown on corruption, now almost a year old, has swollen the items seized very significantly.
The auction site for the city of Wenzhou alone runs to more than 100 pages of items, including large vintage wine collections, mobile phones, office buildings, wedding rings, watches and even buses. Overwhelmingly, though, the items under the hammer are residential property, mostly medium to high-end flats. Activity in Wenzhou has always been seen as a weather vane for Chinese property prices and the signals are not encouraging.
The flats go on sale on the judicial auction sites with an estimated reserve price and, because the courts want a sale, that price tends to be at a decent discount to the prevailing market price. An additional appeal is that there is also no commission charged.
Yet many do not make the reserve price. Out of a batch of 157 auctions conducted by the Luchent District Court in Wenzhou, 72 fell through because there was no bid at all. Local property agents are starting to get very twitchy over what Taobao is telling them about the secondhand market.
Discounts may work for underpants, but they do not appear to do so for second-hand property. Chinese are still buying newly built apartments with gusto, on the assumption that eventually the resale market will be robust: the auctions seem to be sounding an alarm over that assumption.
via China in numbers: secondhand view with salutary warning | The Times.