Chinese consumers spent nearly 700 billion RMB on e-commerce platforms like JD.com, Pinduoduo and Alibaba’s Tmall during China’s mid-year 618 shopping festival in 2022, although cautious post-lockdown consumers put a damper on some of the festival’s usual fireworks, writes Robynne Tindall
China’s major e-commerce platforms sold approximately RMB 695.9 billion (£84.7 billion) of goods during China’s annual 618 shopping festival (measured in gross merchandise volume from 31 May to 18 June) according to data monitoring firm Syntun. Tmall was the top-performing traditional e-commerce platform, but live streaming e-commerce platforms like Douyin and Kuaishou exhibited strong growth, generating a GMV of RMB 144.5 billion (£17.5 billion) up from RMB 64.5 billion in 2021.
Despite these huge numbers, JD.com sales only rose 10.3% compared to last year, a sharp decrease from the 2021 event’s 27.7% increase on 2020. As a result, some have suggested that consumers in China could be reining in their spending following strict Covid-19 lockdowns in cities like Shanghai. As Sixth Tone noted, the lockdowns muted sales in the period leading up to 618, hurting the platform rankings that get merchants onto consumers’ homepages on apps like Tmall and JD.
Platforms had recognised this potential turn down in spending prior to 618, and many shifted from a sales-driven to a service-driven strategy that aimed to retain customers through value-added services rather than capture new ones. For example, JD promoted the reliability of its in-house logistics solutions in response to supply chain disruption caused by lockdowns. It also launched a “green impact initiative” to label products that conform to a set of environmentally friendly standards, with the hope of appealing to shoppers put off by the rampant over-consumption associated with shopping festivals in China. This is a useful insight for brands looking for ways to stand out from the noise during shopping festivals.
Many categories still saw strong sales growth during 618. Household appliances/electronics were the most popular sales category, followed by skincare, then sports and outdoors. However, skincare sales were down 18.9% year on year according to Syntun, as some consumers simplified their skincare routines as a result of not seeing other people face to face during strict lockdowns. Frozen food and ready meals, on the other hand, saw a year-on-year increase of 27.5%, driven by sales via new “immediate consumption” delivery services such as JD.com’s JD to Home (京东到家).
Data from Alibaba also showed niche hobbies driving consumption trends, consistent with the wider shift towards interest or need-based shopping among increasingly wallet-conscious Chinese shoppers. For example, Tmall saw sales of skateboarding gear jump nearly 300% in the 618 festival warm-up period (31 May-June 3). Camping-related products also saw strong growth.
618 is now the second-biggest shopping festival in China, dating back to 2004 when it was a simple one-day festival to celebrate the anniversary of JD.com. Today, the festival is no longer confined to a single day or platform, with promotions starting as early as 1 June and extending beyond 18 June (this year’s event on JD lasted from 23 May to 20 June).
While sales may have taken a hit this year, the scale of the 618 festival remains huge, once again highlighting the need for brands to stay on top of the shopping festival calendar in China. In addition to 618 and Singles’ Day, other key shopping festivals include Lunar New Year in January/February, Women’s Day on 8 March, and the 12.12 festival on 12 December.