China‘s annual 618 festival—an e-commerce-led shopping frenzy that occurs on and leading up to June 18—saw sales drop this year for the first time in at least eight years.
JD.com created the shopping holiday in 2010, and the name and date of the festival align with the day the company launched: June 18, 1998. 618 festival was originally a way JD.com sought to compete against competitor Alibaba, which started another major Chinese shopping event—Singles’ Day, also known as Double 11—in 2009.
Since then, both Singles Day and 618 festival have grown astronomically, with shoppers planning purchases around the holidays in the same way other markets might plan around Amazon Prime Days, Black Friday or Cyber Monday. Despite the two shopping events’ beginnings with just two companies, all major Chinese e-commerce players participate in the unofficial holidays now.
According to estimates from data analysis firm Syntun, which annually tracks 618 performance, the festival’s gross merchandise volume (GMV), which tracks the value of items sold on e-commerce platforms, came in at 742.8 billion yuan ($102.3 billion) this year. That’s down from 798.7 billion yuan ($110 billion) in 2023, marking a nearly 7 percent decrease.
Related Stories
Syntun told CNBC that, since it began tracking 618 metrics in 2016, this was the lowest sales had dipped.
Despite Syntun’s gloomy estimates, JD was quick to boast that this year, 618 had yielded a “new record for both transaction volume and orders.” The company began its 618 promotions in late May this year, choosing a longer promotional window in favor of allowing consumers to put deposits down on certain products and complete their purchase during the days of the festival.
Rival Alibaba did the same for its Tmall and Taobao platforms.
Though JD considered its performance on its own holiday strong, Syntun’s data shows Alibaba’s Tmall grabbed a higher volume of GMV, leaving JD in the secondary slot. PDD Holdings’ Pinduoduo came in third. Syntun considers those three platforms, as well as a few others, “traditional” e-commerce platforms, which it said accounted for 571.7 billion yuan ($78.7 billion) of the total GMV this year. Last year, the same group of traditional platforms saw a GMV of 614.3 billion yuan ($84.6 billion), Syntun said.
Meanwhile, livestreaming platforms like TikTok, Kuai Shou and Dian Tao, came in with a GMV of 206.8 billion yuan ($28.5 billion). TikTok led the way in terms of live shopping market share for 618.
Syntun called the livestreaming sector’s performance “brilliant,” which may be attributable to the fact that livestreaming was the only e-commerce subcategory that saw any marked growth during 618. Last year, livestreaming GMV came in at 184.4 billion yuan ($25.4 billion).
Despite some growth in livestreaming, the holistic drop off for this year’s 618 festival could be cause for concern. Even during the Covid-19 pandemic, GMV grew for the 618 festival, so seeing that decline could spell trouble for a market already battling against a lower-than-desirable long-term economic forecast.
In late May, the International Monetary Fund said that, while it expects China’s economy to grow at a rate of 5 percent this year, by 2029, that growth could have slowed to just above 3 percent, a byproduct of an aging population and a housing and property sector fraught with problems.
Even if Chinese consumers begin to lose interest in e-commerce giants like JD and Alibaba, other markets are showing a certain thirst for low-cost goods in the face of inflationary pressures. Some Western shoppers have, in turn, started purchasing more from e-commerce platforms like Temu, Shein, Alibaba and more. Salesforce projected that these platforms, and others, could command 21 percent of Western holiday spending this year.
Singles’ Day, which occurs annually on November 11, could be an indication of whether Chinese consumers will regain a fixation with ultra-low deals from e-commerce providers as Western consumers increase their consumption of value items.