China’s mid-year 618 shopping festival to boost consumption, pave way for economic rebound in H2
Published: Jun 01, 2022 10:18 PM

Logistics company staff sort packages at a storage center in Qinhuangdao, North China's Hebei Province on November 10, 2021 as huge amounts of goods flood in amid the Double 11 online shopping festival. Photo: VCG

Logistics company staff sort packages at a storage center in Qinhuangdao, North China's Hebei Province on November 10, 2021 as huge amounts of goods flood in amid the Double 11 online shopping festival. Photo: VCG

China's major e-commerce platforms including JD and Alibaba's Tmall have officially kicked off this year's 618 mid-year shopping festival on Tuesday buoyed by record deliveries and orders.

It is expected that the shopping spree which is the first major shopping event after COVID-19 cases have declined nationwide will be an important window to stimulate consumer spending and pave the way for an economic rebound in the second half of this year, experts have claimed.

On Tuesday night, only 10 minutes after the launch of 618 e-commerce extravaganza, the number of brick-and-mortar shops that generated orders on JD increased by 170 percent year-on-year, according to a statement sent by the company to the Global Times.

Data from Alibaba showed that its delivery arm Cainiao saw a 35 percent increase in the number of direct signed orders compared with the same period last year as of 12 pm on Wednesday.

More than 29,000 overseas brands from 87 countries and regions will join the shopping spring on Alibaba's Tmall, including more than 3,000 new overseas brands, according to a statement sent by Tmall to the Global Times.

Italian fashion business Max Mara which participated the campaign on Tmall for the first time this year saw the transaction volume exceed one million in only two minutes on Tuesday while Prada's sales in the first hour on Tmall also grew by triple digits from last year.

Chinese local brands are also enjoying record results during this year's 618 event. TASOGARE, a new coffee brand told the Global Times that it has tripled the sales target this year from a year earlier. "Although it is difficult, we are confident to achieve it," the company said.

During this year's 618 campaign, major e-commerce platforms have announced their biggest shopping discounts seen in recent years with a reduction of about 50 yuan ($7.48) for every 300 yuan spent. On top of that Pinduoduo has announced an additional 3 billion yuan in red envelopes which will be handed out during the festival.



The large scale promotion made by platforms and merchants has overlapped with greater support from local governments with the issuance of large amount of shopping vouchers to stimulate consumer confidence.

Xiong'an New Area, in North China's Hebei Province has handed out coupons in digital yuan to local residents which can be used to buy home appliances on JD with a discount of as much as 500 yuan. Shenzhen in South China's Guangdong Province has offered consumers as much as 15 percent subsidies for buying mobile phones, computers and digital appliances.

The unprecedented scale of promotion which overlaps with the large amount of the consumption coupons issued by the government could have a spillover effect to unleash the suppressed consumption over recent months, Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Wednesday.

"With the full resumption of work and production in Shanghai and the outbreak under control in Beijing, this year's 618 campaign will become a key window to boost consumption. It is expected that enterprises and platforms will reap a wave of good results at the shopping spree," Wang said.

Yuan Hui, a local resident based in Shanghai told the Global Times on Wednesday that she has spent over 500 yuan for the 618 campaign to buy cosmetics and new clothes to prepare for the full work resumption with a new look.

Although it is hard to say if a retaliatory consumption will occur, the national retail sales volume will bounce back in June and achieve positive growth from a nosedive in April as major Chinese cities are inching back to normal life from the shadows of omicron outbreak, Wang said.

On the supply side major e-commerce giants in this year's event have announced an array of supportive measures for merchants and pledged to help them address difficulties with intelligent logistic network and financial subsidies.

Tmall has announced 25 measures to alleviate the operation pressure for merchants with financial subsidies, smooth logistics, more internet data flow exposure. will also charge less fess on merchants for ads coverage and data flow to help shops gain more clients with less cost.

JD said it aims to leverage its nationwide network of intelligent logistics and warehouses to reduce the impact of the epidemic on the supply chain operations of the merchants. The company estimated that its peak transport volume will exceed 60 million items a day during the campaign. 

To boost its transportation capacity, JD Logistics has opened more than 50,000 transportation lines with nearly 70,000 daily truck departures.

The temporary measures taken by platforms are believed sufficient to solve the bottleneck faced by small business owners in the process of work resumption, bring more orders and drive upstream and downstream enterprises to tide over difficulties together, Wang said.

"All together, it will help rebuild the market confidence and lay a solid foundation for the economic rebound in the second half of the year," Wang added.