Chinese shoppers purchase items online in Zhoushan city, east China's Zhejiang province, June 18, 2024.
Photo | Future Publishing | Getty Images
China's annual mid-June 2020 e-commerce festival saw its first decline in sales in eight years, according to retail data provider Xintun, showing that consumption recovery in the world's second-largest economy remains fairly slow.
Sintung estimated that companies' gross merchandise volume (GMV), or sales, during the shopping festival fell 7 percent from last year to 742.8 billion yuan ($102.3 billion).
Sintung told CNBC that this is the first time it has seen a decline in sales since it began monitoring the event in 2016.
The event is named after Chinese e-commerce giant JD.com's founding date on June 18, but other companies such as Alibaba Group's Tmall and PDD Holdings' Pinduoduo are also participating, offering deep discounts and special sales.
During this year's 618 festival, JD.com and Tmall offered discounts of up to 20% on select Apple iPhone models.
It is China's second-biggest event in terms of annual sales after November's Singles' Day, and both are seen as barometers of household consumption.
According to Sintung's analysis covering more than 20 platforms, sales have been sluggish this year despite some companies extending the 618 sale period. For example, Tmall started offering its 618 sale as early as May 20 this year, instead of the usual start date of May 31.
The decline in sales reflects weak consumer confidence in the world's largest e-commerce market as the country faces a number of headwinds, including high youth unemployment and a prolonged real estate crisis.
According to Sintung, even during the COVID-19 pandemic, sales increased by 618 cases.
The pandemic has also given rise to the phenomenon of online retailers and influencers selling products through livestreaming, also known as “live commerce” or “livestreaming e-commerce.”
Social media platforms with livestreaming capabilities are expected to generate 206.8 billion yuan ($28.4 billion) of GMV in 2020, up from 184.4 billion yuan ($25.4 billion) in 2023, according to Xintun, with ByteDance's Douyin having the highest GMV in the sector.
Despite the overall decline in GMV, some traditional e-commerce platforms have performed well this year.
JD.com said on Wednesday that sales and order volumes during the festival hit record highs, but did not disclose sales figures.
Meanwhile, Tmall, which ranked first in sales in Sintung's report, said the GMV of 365 brands on its platform exceeded 100 million yuan (US$13.8 million) as of Tuesday, doubling the GMV of more than 36,000 brands.
The 618 event “has had its ups and downs,” according to a memo released by HSBC on Thursday. Sales started strong in the first half of the festival, according to estimates from third-party data provider Yiguan, but appear to have slowed in the second half, based on baggage volume data, the memo said.
China's economy faces headwinds, but retail sales rose 3.7 percent in May from a year earlier, beating analysts' expectations, while industrial production and fixed-asset investment fell short of forecasts in a Reuters poll.
—CNBC's Evelyn Chen and Vivian Hsu contributed to this report.
