China’s annual 618 Shopping Festival ended Saturday with some sellers seeing a slowdown from prior years.
JD.com, the e-commerce giant that created the original event, said total transaction volume of 379.3 billion yuan ($56.7 billion) beat last year’s total of 343.8 billion yuan ($54.3 billion). While it said sales set “a record high” versus 2021 numbers, the result marked 10 percent year-over-year growth. That’s a far cry from last year’s 27 percent growth over 2020. Transaction volume totaled 269.2 billion yuan (nearly $38 billion) in 2020, for more than 28 percent growth versus 2019.
At a media briefing Saturday, JD Retail CEO Lijun Xin said Covid-19 outbreaks are challenging retail and forced the company to “recognize the value of supply chain in an explicit and profound way.” That’s why JD chose the “Responsible Supply Chain” theme to promote this month’s event.
Xin credited the company’s “solid” infrastructure and digitally intelligent technologies, with cementing JD Logistics’ same or next-day delivery services during the event. Those capabilities now cover 94 percent of China’s counties and 84 percent of townships.
JD also invested in omnichannel services to enhance the shopping experience. Brick-and-mortar retailers used the JDDJ and Shop Now platforms, fulfillment services partially owned by JD, to give shoppers within a three-mile radius one-hour delivery on groceries, toys, clothes and other items. JD data showed that 1.5 million stores, including Sephora and Walmart, saw orders increase 77 percent year-over-year.
What’s more, 618 helped JD test its latest omnichannel retail launch, The J Shop—a department store selling fashion and lifestyle products from international brands. Shoppers could access The J Shop through JD’s app during the festival and at physical stores opening in China this month.
Rivals like Alibaba, Pinduoduo, Suning, Douyin, Kuiashou and others declined to release their own sales data from the 618 event, but Beijing retail insights firm Syntun estimated that sales across 40 platforms carrying 87,238 brands generated about 695.9 billion yuan ($104 billion). It estimated that sales peaked at 578.5 billion yuan ($89.4 billion) in 2021.
“As the most important consumer battle field in the first half of the year, the annual 618 Shopping Festival has become a crucial market of business for all e-commerce platforms,” it said, adding that the event featured better experiences, “richer lists, more efficient logistics and more considerate after-sales services.”
E-commerce platforms focused on livestreaming “performed brilliantly,” it said, with virtual product demonstrations and try-ons generating a gross merchandise volume (GMV) of 144.5 billion yuan ($21.6 billion). Coresight Research head of Greater China advisory Echo Gong predicted that Douyin, the Chinese version of TikTok, and Kuai, would see gains, as they allocate resources to helping brands open stores and coordinate livestreaming events in the weeks leading up to 618. Traditional e-commerce GMV reached 582.6 billion yuan ($87 billion), with Alibaba’s Tmall at No. 1, followed by JD and Pinduoduo.
Consumers prioritized household appliances and electronics purchases, which saw 6.7-percent year-over-year growth. Skincare and makeup declined 18.9 percent and 22.1 percent, respectively. Syntun noted that sport and outdoor apparel generated a GMV of 24.9 billion yuan ($3.7 billion)—up 9.1 percent from 2021. Sports gear sales were led by Nike, despite its recent challenges in China, followed by Chinese athletic brands Li-ning and Anta, with Adidas and Fila rounding out the top five. Meanwhile, outdoor labels like China’s Toread, Camel and Pelliot resonated with shoppers, followed by Decathlon and The North Face.
China’s shopping holiday ended as U.S. retail giants Amazon and Target prepare for their own sales next month and hope for a home run.
Both Amazon and Target, in addition to Walmart, reported disappointing first-quarter results, sending shockwaves through the sector and sparking concerns for retail’s prospects in a year marked by historic inflation. Emarketer last week projected that Amazon might see 9 percent e-commerce growth for the fiscal year versus its original 14.6 percent outlook.
Target and Amazon will go head to head with competing sales next month. The former’s Deal Days on July 11-13 overlaps with Amazon Prime Day on July 12-13. The Minneapolis-based retailer is likely looking to offload much of the inventory it’s built up over the past several months. Amazon, which just lost its CEO of Consumer Worldwide to Flexport, will be looking to outperform last’s $11.2 billion in GMV, the lowest year-over-year growth since Prime Day started.