China’s mid-year e-commerce sales festival failed to stir up a great deal of excitement among shoppers, industry experts said, even as major platforms extended offers to a weeks-long period to woo belt-tightening consumers amid a gloomy economic outlook.
The 618 festival, named after the June 18 founding date of e-commerce provider JD.com Inc (京東), but embraced by all platforms, is China’s second-biggest annual sales event after Singles Day in November and a key test of household consumption appetite.
“With discounts available year-round, buzz around 618 has diminished,” WPIC Marketing + Technologies chief executive officer Jacob Cooke said.
Photo: Reuters
“But the festival is still generating a GMV bump from baseline and overall GMV should be up slightly from 2023,” he said, referring to gross merchandise volume, a widely used proxy for e-commerce firms’ online sales.
JD.com yesterday said that its turnover and order volumes reached a new high over the festival period, which ran from the end of last month to Tuesday. It did not elaborate on the exact growth rate of its orders or sales during the festival, which was first launched in 2010 as just a one-day sale.
Data from consultancy Syntun (星圖數據) showed that China’s total online sales volume fell 7 percent year-on-year to 742.8 billion yuan (US$102.4 billion) during this year’s 618 festival.
Major players such as JD.com and Alibaba Group Holding Ltd’s (阿里巴巴) Tmall (天貓) and Taobao (淘寶) e-commerce platforms this year canceled a traditional pre-sale period in which shoppers could place deposits on products and complete the purchase during a later sales period. Instead, the sales period itself was extended.
That extension, combined with China’s broader consumer belt-tightening, which is pushing retailers to constantly focus on low prices, also contributed to 618 garnering less enthusiasm than the event once enjoyed, analysts said.
An analysis by consultancy Re-Hub of luxury brand discounting strategies during this year’s 618 festival found that nearly half of the brands they tracked either maintained or reduced their average discounts from the previous year, while 20 percent increased their average discounts.
Alibaba had previously flagged in a mid-618 season update that sectors such as home appliances were outperforming on its platforms, led by brands such as Haier Group (海爾) and Xiaomi Corp (小米).
The e-commerce giant yesterday said that international brands, including Nike Inc, L’Oreal SA, Lancome and Adidas AG, surpassed 1 billion yuan of sales on Tmall during the period.
Apple Inc offered discounts of up to 2,300 yuan on select iPhone models via its Tmall flagship store in a bid to keep pace with domestic competitor Huawei Technologies Co (華為).
Within the first hours of sales, Alibaba said Apple had sold more than 200 million yuan of merchandise.
Given low prices are now such a common feature of China’s consumer landscape, it is becoming more difficult for e-commerce platforms to keep customers engaged — even with traditionally successful sales festivals.
“I haven’t been paying constant attention to 618, to be honest, because there are just so many [shopping festivals],” said Anita Meng, a university student from Hangzhou.
“Even if these festivals are still going strong, my wallet is already exhausted,” she said, adding that she only made one purchase this 618 — a gaming chair for her older brother that was reduced from more than 1,200 yuan to 1,000 yuan.
US PROBE: The Information reported that the US Department of Commerce is investigating whether the firm made advanced chips for China’s Huawei Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract maker of advanced chips, yesterday said it is a law-abiding company, and is committed to complying with all applicable laws and regulations including export controls. The Hsinchu-based chip giant issued the statement after US news Web site The Information ran a story saying that the US Department of Commerce has launched a probe into TSMC over whether it breached export rules by making smartphone or artificial intelligence (AI) chips for China’s Huawei Technologies Co (華為). “We maintain a robust and comprehensive export system for monitoring and ensuring compliance,” the statement said. “If we
REGIONAL COMPETITION: Over the past few years the Philippines has lost ground to neighbors such as Vietnam, Indonesia and Malaysia, a Philippine official said The Philippines is trying to enlist Taiwanese chip giants to expand in semiconductors, a bid to catch up with its neighbors who are emerging as significant suppliers in the industry. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) are among companies the Philippines is reaching out to as it seeks equipment and expertise to build out chip fabrication operations, said Dan Lachica, head of the Southeast Asian country’s main electronics industry group, the Semiconductor and Electronics Industries in the Philippines Foundation Inc (SEIPI). The association is working with Philippine officials in Taiwan to talk with potential
DEMAND FOR AI CHIPS: Net income in the third quarter surged 31.2% quarter-on-quarter to NT$325.26 billion, the strongest quarterly return in the company’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday raised its revenue forecast to annual growth of 30 percent this year, thanks to strong and sustainable demand for artificial intelligence (AI) processors for servers. It was the second upward adjustment from 25 percent year-on-year growth estimated three months ago, despite recent concerns about whether the AI boom could be another technology bubble. “The demand is real. It’s real. And I believe it is just the beginning of this demand. Alright, so one of my key customers said the demand right now is ‘insane,’” TSMC chairman and chief executive C.C.
Starbucks Corp might have the more recognizable name, but 7-Eleven’s City Cafe remains the king of Taiwan’s fresh coffee market, helped by the convenience store chain’s extensive market presence and product diversification. President Chain Store Corp (PCSC, 統一超商), which runs both the 7-Eleven and Starbucks store chains in Taiwan, established the City Cafe brand in 2004. The brand took off when actress Gwei Lun-mei (桂綸鎂) became its spokesperson in 2007. City Cafe’s sales exceeded NT$10 billion (US$311.69 million) for the first time in 2015, surpassing the revenue of Starbucks Taiwan, and rose to more than NT$17 billion last year, exceeding the NT$14.98