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618 Shopping Festival in 2020

By June 29, 2020 No Comments

The biggest mid-year online shopping festival ends in China on June 18 this year. As introduced in the earlier blog, 618 Shopping Festival, launched by JD.com in 2004, has grown to be the second largest e-commerce shopping festival in China and now includes the other e-commerce giants such as Alibaba and Pinduoduo.

Promotion poster of 618 Shopping Festival this year.

During the festival, the Chinese e-commerce platforms offer discounts and shopping coupons to generate more sales. Considering the impact of COVID-19 pandemic on the Chinese economy, 618 Shopping Festival this year is one of the most important barometers of how much Chinese consumers are spending as China slowly recovers from the pandemic.

New Sales Record

The two largest Chinese e-commerce giants reveal their sales to the public lately. Alibaba Group’s Tmall platform saw its accumulated sales during the three-week-long shopping festival from June 1 to June 18 top 698 billion yuan ($99 billion). And JD.com reported that its sales for this year’s “618” event reached 269 billion yuan ($38 billion), up more than 33% over last year.

According to XingTu Statistics that has analyzed the sales of the main e-commerce platforms during the shopping festival, the sales of household electrical appliances ranks the first place among all the other branches, which reaches 62 billion yuan ($9 billion). It is followed by mobile phones and personal care that sit at the second and third place respectively.

Household electrical appliances ranks the first place among all the other branches, Source: XingTu Statistics.

JD.com says that its sales of televisions on June 18 surpassed 100 million yuan ($14 billion) in just 31 seconds, while air conditioners worth more than 500 million yuan ($71 billion) were sold within two minutes. Apple’s products notched up more than 100 million yuan ($14 billion) in sales within five seconds.

The promotion poster of Midea, one of the most popular Chinese household electrical appliance brands.

The shopping festival is not just a sales event for the big companies any more. Alibaba said recently that the number of SMEs participating in the sales gala jumped 166 percent this year compared with 2019.

Livestreaming sales

The popularity of livestreaming sales has been growing in China over recent years and more and more brands choose to adopt this sales strategy to generate more sales revenue. During the 618 Shopping Festival this year, both Alibaba and JD.com seized the chance and had promotion through livestreaming.

JD.com cooperated with short-video platform Kuaishou, Tiktok’s biggest rival in China, to launch the first big promotional event on June 16, when celebrities and popular Kuaishou key opinion leaders offered discounts and coupons to sell products via livestreaming.

The influencer is having a livestreaming sales.

It is not only the e-commerce platforms that are striving to help promote during the shopping festival, but also the Chinese government who put efforts into spurring domestic consumption through the festival. For example, Beijing offered government-sponsored coupons to JD.com users, who could use them to get discounts on items like home appliances or furniture. In addition, Alibaba invited many city majors to join the livestreaming sales to sell their local fruits and vegetables.

It can be said that livestreaming sales has become a significant and inseparable part of the Chinese e-commerce industry.

Consumers

As Chinese market is huge and dynamic, the Chinese cities are often categorized into first-tire cities, second-tier cities and so on. The first-tire cities include normally the most developed and prosperous Chinese cities such as Shanghai, Beijing, Guangzhou and Shenzhen.

Consumers in third-tier and even smaller cities witness the most rapid growth. Source: Trustdata.

It is noteworthy that consumers in third-tier and even smaller cities witness the most rapid growth and account for 45% of the new consumers that join this shopping festival for the first time.

Pinduoduo ranks just behind Alibaba Group with more than 600 million users today. It made its debut on Nasdaq in 2018.  The picture above is the company logo of Pinduoduo.

Pinduoduo, a Chinese e-commerce platform that is well-known for its huge consumer group living in smaller developing cities and towns, rises to the second place right after Alibaba’s Taobao regarding the increased number of its new consumers during this year’s 618 Shopping Festival.

Summary

As the first grand online shopping festival after COVID-19 pandemic swept across China this year, the new sales record during this year’s “618” shows that the purchasing power of the Chinese consumers and may further point to a recovery of the Chinese economy.

Even though retail sales fell 2.8% in May compared to 2019, online sales of physical consumer goods rose 15.6%, revealed by the Chinese government. Chinese e-commerce giants, including Alibaba, JD.com and Pinduoduo, are benefiting hugely from the acceleration of the shift from physical store shopping to online shopping that is happening in China.

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