Amid the resurgence of COVID-19 cases in China and external uncertainties throughout the spring, the annual 618 shopping spree kicked off in China in late May. This mid-year sales festival is viewed as a refreshing opportunity for brands to boost their 2022 revenues. 618 is expected to play a critical role in encouraging consumption recovery, stimulating consumer confidence, and bolstering the economy.
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To navigate market risks and uncertainties, Chinese online e-commerce platforms Alibaba’s Tmall, JD.com, WeChat Smart Retail, and Douyin have rolled out multiple measures to support their merchants during the mid-year shopping bonanza. Figures released by Tmall, JD.com, and WeChat show that consumer spending is rebounding.
In this article, we highlight how e-commerce giants support retailers, how mainstream marketplaces perform, and the key trends fuelling consumption.
Brands do not stand alone as marketplaces provide supportive measures
Early in May, Tmall, JD.com, and other e-commerce platforms announced their policies for this year’s 618 event. The rules and mechanisms set up for consumers and merchants this year are more appealing than in previous years.
During the 618 Merchant Conference, JD.com released 30 new initiatives to support overseas merchants for better performance during the 18th June campaign. The initiative provides preferential benefits for U.S. merchants that debuted through the e-tailer’s collaboration with Shopify. In addition, JD.com provides key account merchants with a variety of supporting resources, including exclusive traffic, special promotional activities, and participation in JD Worldwide’s “Overseas Direct Purchase” campaign.
These initiatives are implemented in addition to JD waiving deposit and platform costs.
For more exposure, items identified as ‘potential bestsellers’ were featured in the cross-border marketplace’s “selected product pool”. JD also provided unique incentives and a variety of newcomer advantages to Shopify shops’ first-time customers.
As one of the biggest shopping festivals of the year, 618 presented the ideal stage for merchants to showcase high-quality products to JD’s 580 million customers in China.
Alibaba’s e-commerce arm, Tmall, also disclosed incentives, aside from the 25 merchant policies, to support merchants on the platform. These cover 5 aspects: financial subsidies, logistics enhancement, traffic subsidies, special measures for the pandemic, and technology upgrades. In addition, merchants received around CNY 10 billion (USD 1.5 billion) in customers deposits during the May pre-sale period to secure their orders. The remaining portion of up to CNY 100 billion (USD 15 billion) will be delivered to enterprises once shipping begins between 1st June and 30th June.
WeChat Video Channels launched its first-of-a-kind 6.18 Livestreaming Festival on 31st May, unveiling a suite of initiatives to empower merchants on WeChat to participate. The suite includes supportive mechanisms like a platform traffic incentive, a discovery page exclusive recommendation reward, and a livestream traffic subsidy.
This is the first time that Douyin has been officially involved in the 618 e-commerce battle. Thanks to the platform’s wildly popular short-form video content, Douyin is rapidly eroding market share from the two former mainstream e-commerce giants, Alibaba’s Taobao Tmall and JD.com.
The ‘Douyin 618 Good Products Festival’ took place from 1st to 18th June. During the period, Douyin offered discounts on platform service fees for merchants, brands, and livestreamers.
Customers and influencers stay tuned to 618
Despite inflation exceeding analysts’ expectations, customers demonstrated a strong demand and willingness to make purchases during the mid-year shopping festival. Customers are predicted to buy products for both themselves and their families. On the social media platform Little Red Book, the number of search results for “618 2022”, “When 618 starts”, and “What to buy” have reached 14k, 230k, 28k respectively.
Key Opinion Leaders (KOLs), who acted as influencers in different industries, shared their ‘must-buy’ checklists on social media. These range from beauty, fashion, nutrition, lifestyle, and pet goods, among others. The shopping checklist, which is very popular amongst Chinese consumers, can save a lot of time and energy on product discovery leading to quicker buying decisions for customers. Shopping checklists are also a great medium for new brands to create awareness among their target customers.
Consumption recovery behind the pre-sale figures
JD’s 618 Grand Promotion saw signals of recovery. As of the pre-sale day (23rd May), the JD home appliance sector garnered a soaring increase of 270 percent in the pre-sale deposit amount, compared to last year’s 618 event. Among them, the pre-sale order volume of mid-tier and high-end products accounted for more than 60 percent.
The number of merchants and products participating in pre-sales marketing has increased by more than 50 percent and 2 times respectively. Top categories include apparel, home, beauty, sports, key account luxury watches, and small and medium-sized merchants.
Customers typically prefer to stock up on products during the pre-sale promotion. For example, in the first 3 minutes of the pre-sale day this year, JD beauty sales exceeded pre-sale transactions for the whole day of the previous year. The overall pre-sale order amount increased 200 percent year on year.
As of 29th May, JD data shows that the order volume of health and service consumption “all-scenario” pre-sale period of JD Health increased 186 percent year on year.
International products from all over the world have had a good showing as well. During the pre-sale period, JD’s own imported health care products’ pre-sales order amount increased 140 percent year on year.
JD 618 Grand Promotion officially opened at 8 p.m. on 31st May. In the first 10 minutes, nearly 150 international brands saw sales increase by more than 200 percent. Approximately 100 subcategories saw sales increase by more than 100 percent year on year. The imported food and wine fresh category saw sales jump 160 percent year on year.
One notable highlight is how the designer fashion category has boomed. Pre-sale order amounts for more than 20 brands, such as Chopard, Tory Burch, and MCM, increased by more than 100 percent year on year.
The top three pre-sale orders from JD Worldwide were Nintendo, Sisley, and Clé de Peau. Japanese skincare brand IPSA has captured customer love, grabbing first place for the most pre-sales orders this year.
On the evening of 26th May, the 2022 Tmall 618 pre-sales events officially debuted. Livestream celebrity Austin Li’s livestream campaign, which brought together major brands, became the highlight of the day. Li initiated his 618 livestreaming at 4 p.m. (China time), and there were over 2 million viewers who joined the campaign within 20 minutes.
The top anchor’s livestream room mirrors the 618 festival. After 4 and a half hours of livestreaming, Li’s livestreaming room broke 100 million views at the 21:35 mark with 252 links to products. The number of views surged by more than 10,000 in one second and by more than 7 million in 10 minutes. Li ended up with more than 150 million views for the first day of pre-sales, the highest of other livestreams in terms of views.
JD.com takes the center stage of the 618 gala once again
According to the data, from 8:00p.m. on May 31 to 11:59p.m. on June 18 Beijing time, JD.com gained a total transaction volume of CNY 379.3 billion (USD 56.48 billion) for its 2022 618 Grand Promotion. JD.com’s 618 final result surprisingly surpasses last year’s CNY 343.8 billion (USD 53 billion) with a year-on-year 10.3 percent increase.
Amid the destabilizing factors and uncertainties, JD.com did set a new record ever, hitting a new high and creating the strongest consumption trend this year.
This e-giant attributes the milestone record to the company’s solid supply chain capabilities.
Douyin’s official first 618 festival was a success. Douyin e-commerce revealed that, from 1st to 18th June, its livestreams totaled 40.45 million hours, and short videos linked to shopping carts were played 115.1 billion times. During the whole 618 gala, Douyin’s Shopping mall scenarios led to a 514 percent year-on-year increase in sales, and the number of merchants participating in 618 soared 159 percent year on year.
To add, Douyin emphasized that the post-0ps group has become the new force of 618 consumption, demonstrating a 164 percent year-on-year growth in purchase volume. The most critical sales have not yet been announced.
In contrast to its rivals having created a big scene to celebrate 618, Alibaba’s Tmall 618 festival seems a pretty low-key affair. So far, Tmall hasn’t announced further details on total GMV, category growth, and ranking. According to the latest figures from Tmall, there were more than 260,000 brands participating in Tmall 618 this year, with nearly 300 brands with a turnover of over CNY 100 million (USD 12.74 million).
410 new brands saw a turnover growth of more than 100 percent, and 214 time-honored brands saw a turnover growth of more than 100 percent. And over 100,000 small and medium-sized merchants with a growth rate over 100 percent in sales.
In a thank-you letter to merchants, Trudy Dai Shan, head of Alibaba’s new China digital commerce unit, emphasized that Tmall has once again achieved a positive year-on-year growth in 618 retail sales, witnessing a huge recovery in consumer confidence.
When 618 comes to the end, JD.com and Douyin have made it to reinforce their influence in the e-commerce market. For Singles’ Day bonanza in the second half of the year, it is the critical period to expect significant shifts within the market.
After all, the e-commerce battlefield is not about who has the highest peak, but who lives longer.
Chinese cities roll out initiatives to encourage consumption
China’s municipalities are also giving out monetary incentives to encourage consumption. Since the beginning of this year, the Shenzhen government has issued several rounds of consumption vouchers in the format of digital blockchain CNY to stimulate consumption at local offline retailers.
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Since the Labor Day holiday in May, Shenzhen started to issue CNY 500 million (USD 74 billion) worth of consumption vouchers for its citizens to use for offline catering consumption and online shopping. Just 5 minutes after the campaign began, every coupon was taken.
(Source : Azoya)