E-commerce sales dropped 7.0% from a year ago during China’s second-biggest annual shopping event, the 618 festival, third-party data provider Syntun said in a report on Wednesday. The dip in the mid-year festival’s numbers came despite major player Alibaba achieving a historical record on 88VIP loyalty membership sign-ups and JD announcing that it had set a new record for both transaction volume and orders.
A total of RMB 742.8 billion ($102.3 billion) in merchandise volume was generated by the country’s online retailers as part of the event, according to Syntun, the first drop recorded since figures began in 2008, as Chinese consumers tighten their wallets amid economic uncertainty.
Why it matters: E-commerce platforms invariably choose to release consumption data that is favorable to them in an attempt to portray untouchable positions in a crowded industry.
Details: Led by emerging platforms Douyin (China’s TikTok sibling) and Kuaishou, livestreaming-based sales enjoyed continuous growth and popularity during the month-long 618 festival period, with accumulated sales rising 12.1% to RMB 206.8 billion compared to the same period last year.
- Alibaba’s Taobao said it saw 81 livestreaming channels operated by merchants and influencers sell goods valued at more than RMB 100 million each, and JD, which only began focusing on the shopping format in late 2023, noted growth of over 200% in orders placed via livestreams. Meanwhile, Xiaohongshu reported livestream orders more than five times those of last year as of June 18.
- Pinduoduo, a fast-rising platform fueled by its highly-affordable offerings, has tried hard to maintain its ultra-low price advantage during the 618 period, with the Temu sister app introducing a price-adjustment tool that allows it to automatically cut prices within a range set by merchants to ensure better exposure for their items.
- According to a screenshot of a notice within Pinduoduo, “the feature can not be turned off until the end of the promotion on June 21, 2024 once it is turned on.” This language suggests that low prices potentially come at a cost to merchants and supply chains.
- As the creator of the 618 festival, JD this year faced a major backlash from more than 50 local book publishers as it pushed its “low-price strategy” despite the publishers protesting that the company was discounting books to below-cost prices. Some publishers announced that they would refuse to supply JD in the future. Conflict between merchants and platforms have intensified as the former chase ever lower prices to attract customers.
Context: The 618 festival began more than a decade ago to celebrate the founding of JD, before being adopted by other platforms. Its sales peaked at nearly RMB 800 billion in 2023.
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