The 6.18 shopping festival was China’s largest shopping holiday since the coronavirus outbreak. It was long-awaited as a barometer of how much Chinese consumption has rebounded after lockdowns were lifted.   

To observers’ relief, sales have picked up significantly since the pandemic outbreak. The 6.18 sale outpaced Labour Day and Shanghai 55 shopping festivals, both considered significant shopping events. 

The 55 shopping event in early May achieved $35.3 billion in sales across online and offline channels, data released from Shanghai municipality suggests. This is roughly equal to the transaction volume of JD.com’s 16-day long 6.18 shopping festival. 

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Deborah Weinswig is CEO and Founder of Coresight Research. Additional contributions by Eliam Huang.

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Explosive growth across platforms

Transaction volume on JD.com reached around RMB 269.2 billion (around $38.1 billion) during the 6.18 shopping festival (June 1—18).

  • Transaction volume saw a year-over-year growth rate of 33.6%, which is higher than that of the 2019 event, at 26.6%. 
  • A total of 187 brands reached transaction volumes of RMB100 million in these 16 days. 
 6.18 Sales on JD.com, 2017–2020 in billions of RMB. Source: Company reports. (Image credit: Coresight)

Alibaba’s Tmall saw the total value of orders on the platform reach RMB 698.2 billion between May 25 and June 18 —2.6 times its sales on Singles’ Day 2019. Apple, Huawei, Adidas, Nike, and home appliances brands Haier and Midea reached RMB 100 million in the first hour of sales on June 1. It took Estee Lauder only nine hours to match its last year’s 6.18 sales on Tmall.

Other players, such as Pinduoduo and electronics retailer Suning, did not disclose their sales data for the event. We estimate sales revenue across all platforms to be around $155.2 billion, based on Alibaba and JD.com’s 2020 market share

B2C Online Retail Market Platforms’ Transaction Share  in China in First Quarter 2020. Source: Statista (Image credit: Coresight)

With 400% year-over-year growth, video conferencing devices had the biggest boost on JD.com. In the post-lockdown world, businesses are trying their best to avoid face-to-face contact. 

As people try to avoid supermarkets, sales of essential consumer packaged goods, such as milk products, shampoo and conditioner, saw 360% and 300% year-over-year growth respectively. Healthcare products also saw significant growth, with 173% year-over-year increase, as consumers looked to boost their immune system to avoid the epidemic.

Top Performing Product Categories in 6.18 Shopping Festival on JD.com

Product/CategorySales increase (YoY)
Video Conferencing Devices400%
Milk Products360%
High-end Shampoo & Conditioner Products300%
High-end Gaming Laptop243%
Air-conditioner200%
Medical & Health Care Products173%
Refrigerator& Washing Machine130%
Fresh Food (including offline sales)100%
Imported Health Products100%
Facial Essence, Lotion/Cream100%
Luxury Products100%
Source: JD.com (Image credit: Coresight) 

The winning sales tool: live-streaming

To enhance its livestreaming capacity, JD.com teamed up with popular short-video platform Kuaishou on June 16. Around 100 key opinion leaders (KOLS) on Kuaishou promoted JD.com products. Users on Kuaishou could purchase JD.com’s products without leaving the Kuaishou app, as well as enjoy quick delivery and after-sales service provided by JD.com. 

E-commerce platforms also invited celebrities and company executives to join livestreaming events. Xu Lei, CEO of JD Retail, together with actress Zheng Shuang, singer Da Zhangwei, and actor Guo Qilin raked in RMB 475 million in their six-hour long livestreaming show. They broke last year’s 6.18 record by Top KOL Viya’s of RMB 62 million per hour.

JD.com 6.18 livestreaming party. (Screenshot: Coresight)

No fancy gimmicks—low prices are the key

Compared with previous 6.18 shopping festivals, this year’s event was more straightforward and simpler in terms of marketing and promotions. E-commerce companies focused on giving out coupons and discounts directly, instead of gamifying the event. 

Previously, consumers had to play games to win coupons. Last year, on JD.com, users had to watch videos on JD.com and answer a few questions. This year, shoppers could directly receive coupons by just clicking a button on e-commerce platforms’ promotion pages. 

In terms of discounts, Tmall offered subsidies worth RMB 10 billion on over 10 million discounted products—equal to Tmall’s  Double 11 subsidies in 2019. JD.com and  Kuaishou gave out RMB 20 billion.

Suning.com tried to beat its competition on pricing. The platform launched a “J-10%” plan, selling products at 10% of JD.com’s price. This initiative covered several categories, including home appliances, mobile phones, computers, and groceries.

A Huawei Mate 30 smart phone cost RMB 3,289 on JD.com and RMB 3,559 on Tmall. On Suning, it cost RMB 3,149 and came with a pair of free earphones. 

Huawei Mate 30 for the price of RMB 3,269 on JD.com during the 6.18 sale. (Screenshot: Coresight)
A Huawei Mate 30 sold for RMB 3,149 on Suning.com during the sale on 6.18. (Screenshot: Coresight)

Such pricing wars are situated against the background of decreasing per capita consumption expenditure in China. In the first quarter, per capita consumption expenditure fell 12.5% year-on-year to RMB 5,082, according to the National Bureau of Statistics. Urban residents spent RMB 6,478, down 13.5% year-on-year, while rural residents spent RMB 3,334, falling 10.7% in the same time period.

C2M products for price-sensitive shoppers

The Taobao Deals app. (Screenshot: Coresight)

As shoppers become more cautious in making purchase decisions due to uncertainties caused by the pandemic, sales of customized products are increasing. The consumer-to-manufacturer (C2M) model, which leverages consumer data to produce tailored products at a low price point, is increasingly popular, meeting consumers’ needs and providing good value for money. 

During 6.18, C2M desktop computers sales increased by 400% year over year on JD.com. On Taobao Deals, Taobao’s designated app for direct-from-factory deals, sales of C2M products saw 500% growth year-on-year during the shopping festival.

Upgraded logistics 

Alibaba’s logistics arm Cainiao used a fleet of automated delivery vehicles and set up new pick-up stations to achieve faster delivery. The company also chartered more than 100 flights and 20 freight trains to ship goods during the event. 

The strategy worked—Around 70% of Tmall orders had already been delivered to consumers by 12:00 pm on June 18. 

A Tmall user reviewed Cainiao’s fast delivery service on Weibo (Screenshot: Coresight)

Consumers came to Cainiao’s official Weibo account to compliment its service. One user called Amy commented that she could not believe that she ordered lipsticks at midnight on June 1 and received the product at noon of the next day.

Logistics is another important element for brands and retailers to consider in order to provide consumers with convenient and seamless shopping experiences. With consumers shifting more to shop online, quick delivery service would become a significant standard for consumers to choose which platform to shop with.

JD Logistics upgraded its logistics network to serve consumers in fourth to sixth-tier cities. The company estimates the growth rate of delivery orders in sixth-tier cities is 150% of first-tier cities. 

The upgrade included JD Logistics linking its 12 highly automated logistics parks to its 13 local warehouses to form an integrated network. The 12 highly automated logistics parks, known as “Asia No.1”, feature automated sorting machines and a smart warehousing software system, which uses algorithms to perform scheduling, coordination, and optimization. 

Automatic sorting machine at JD.com warehouse (Image credit: JD.com)

Key takeaways

The major sales rebound during the 6.18 shopping festival is an encouraging sign for the coming months. It was partly driven by multi-pronged strategies adopted by e-commerce platforms.

Brands and retailers leveraged livestreaming, which allows shoppers to interact with brands and KOLs/celebrities in real-time. Livestreaming has been an especially important tool as the pandemic has reduced visits to shops.

Low prices have also been key to retaining nervous shoppers. C2M products, which are tailored to consumers’ needs and usually sell at a lower price point, are an especially good fit for current consumer sentiment.

Finally, improvements to logistics are another important ingredient for brands and retailers seeking growth in the post-Covid world. With more consumers shifting to shop online, quick delivery services can be a significant competitive edge for platforms.

Deborah Weinswig

Deborah Weinswig is CEO and Founder of Coresight Research, a research and advisory firm that provides future-focused analysis and consulting on the intersection of retail, technology, and fashion. Deborah...