China’s mid-year e-commerce sales festival, the 618 festival, struggled to generate significant excitement among shoppers, according to industry experts. Major e-commerce platforms extended their offers over several weeks to attract cost-conscious consumers amidst a gloomy economic outlook. The 618 festival, named after JD.com’s founding date of June 18 and embraced by all platforms, is the country’s second-largest annual sales event after Singles Day in November. It serves as a crucial indicator of consumer spending patterns.
A lackluster performance during this festival would signal ongoing challenges for China’s economy, which is already dealing with a prolonged property crisis and high unemployment rates. Jacob Cooke, CEO of e-commerce consultancy WPIC Marketing + Technologies, noted that year-round discounts have lessened the festival’s buzz. Despite this, the festival still managed to generate a slight increase in gross merchandise volume (GMV) from baseline levels.
JD.com reported reaching new highs in turnover and order volumes during the festival, which ran from late May to June 18, but did not specify the growth rate. Last year, data from consultancy Syntun showed a combined GMV of 614.3 billion yuan ($85.79 billion) for the festival, up 5.4% from 2022. Analysts expect similar growth this year.
In response to evolving consumer behaviors, major players like JD.com and Alibaba’s Tmall and Taobao platforms canceled the traditional pre-sale period. Instead, they extended the sales period itself. This change, coupled with China’s broader trend of consumer belt-tightening, has reduced the festival’s overall enthusiasm.
Consultancy Re-Hub analyzed luxury brand discount strategies during this year’s 618 festival and found that nearly half of the tracked brands maintained or reduced their average discounts compared to the previous year, while 20% increased their discounts. Alibaba highlighted strong performance in sectors such as home appliances, with brands like Haier and Xiaomi leading the charge.
International brands like Nike, L’Oreal, Lancome, and Adidas each surpassed 1 billion yuan ($137.82 million) in sales on Tmall during the festival. Apple offered discounts of up to 2,300 yuan ($318) on select iPhone models through its Tmall store, competing with domestic rival Huawei. Within the first hours of sales, Apple sold over 200 million yuan of merchandise.
Rival PDD Holdings’ Pinduoduo, which typically does not disclose 618 sales data, did not respond to requests for information. The prevalence of low prices in China’s consumer market has made it challenging for e-commerce platforms to maintain customer engagement, even with historically successful sales festivals.
Anita Meng, a university student from Hangzhou, expressed her indifference toward the 618 festival, citing the abundance of shopping festivals. She only made one purchase—a gaming chair for her older brother, reduced from over 1,200 yuan to 1,000 yuan ($138). This sentiment reflects the broader trend of consumer fatigue and economic constraints impacting the effectiveness of such sales events.
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