China's annual e-commerce sales have failed to generate much excitement among shoppers, even as major platforms extended their sales periods over several weeks to attract budget-minded consumers amid a bleak economic outlook, industry experts said.
The 618 festival, named after e-commerce provider JD.com's founding date of June 18 and adopted across all platforms, is China's second-biggest annual sales event after Singles' Day in November and a key test of household spending confidence.
Weak sales during the festival would suggest that the world's second-largest economy, already struggling with a protracted property crisis and high unemployment, faces further challenges.
“The buzz around 618 has faded as discounts become available throughout the year,” said Jacob Cook, CEO of e-commerce consultancy WPIC Marketing + Technologies.
“However, the festival still generates GMV increase from the baseline, and overall GMV should increase slightly from 2023,” he said, referring to total merchandise value, a widely used indicator of online sales for e-commerce companies.
JD.com said on Wednesday that its sales and order volume hit record highs during the festival, which ran from the end of May to June 18 this year. The company did not elaborate on the exact percentage increase in orders or sales during the festival, which first launched as a one-day sale in 2010.
According to data released last year by consulting firm Xintun, the combined gross merchandise volume of major e-commerce platforms during the 618 period was 614.3 billion yuan ($85.79 billion), up 5.4% from 2022. Analysts widely expect similar growth this year.
Major companies including JD.com and Alibaba's Tmall and Taobao platforms have this year scrapped traditional pre-sale periods where shoppers could pay upfront for products and then complete their purchases during a later sales period, instead extending the sales period itself.
The extension, combined with consumers across China's tendency to save money as retailers continue to focus on low prices, is also why 618 is no longer generating the same enthusiasm it once did, analysts say.
Consultancy Re-Hub analyzed the discount strategies of luxury brands during this year's 618 Festival and found that nearly half of the brands tracked maintained or reduced their average discount from last year, while 20% increased their average discount.
Home appliances and beauty products
Alibaba previously noted in its 618 mid-season update that categories such as home appliances were doing well on its platform, led by brands such as Haier and Xiaomi.
The e-commerce giant said on Wednesday that international brands including Nike, L'Oreal, Lancome and Adidas recorded sales of more than 1 billion yuan ($137.82 million) on Tmall during the period.
Apple is selling some iPhone models at discounts of up to 2,300 yuan ($318) through its Tmall flagship store in an effort to compete with domestic rival Huawei.
Alibaba said it sold more than 200 million yuan of Apple products within the first few hours of sales.
Pinduoduo, a unit of rival PDD Holdings Ltd., has not previously disclosed sales data for the 618 and did not immediately respond to a request for information.
With low prices now a common feature among Chinese consumers, it is becoming increasingly difficult for e-commerce platforms to maintain customer interest, even during traditionally successful sales festivals.
“To be honest, I don't always pay attention to 618 because there are too many (shopping festivals),” said Anita Meng, a university student from Hangzhou.
“Even though these festivities are still going strong, my wallet is already depleted,” she said, adding that her only purchase at 618 was a gaming chair for her brother, discounted to 1,000 yuan ($138) from the retail price of more than 1,200 yuan.
Casey Hall and Sophie Yu
learn more:
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