China's 618 shopping fest sets record, but daily spending slips
[BEIJING] China's largest mid-year shopping festival, 618, ended on Wednesday (Jun 19) with record sales, though daily spending dropped amid an extended sales period aimed at enticing consumers to part with more of their hard-earned money.
The longer sales period helped the combined gross merchandise value (GMV), a business metric commonly used in e-commerce, reach an all-time high of 855.6 billion yuan (S$153.3 billion), according to retail data provider Syntun. That was 15.2 per cent higher than the prior year's 742.8 billion yuan.
The festival, originally a single-day event celebrating JD.com's founding on Jun 18, has evolved into a month-long affair spanning all major e-commerce platforms.
This year's pre-sales began on May 13, a week longer than in 2024, leading to lower average daily spending of 2.31 billion yuan, compared with 2.48 billion yuan last year, according to Reuters calculations.
Alibaba Group's Tmall kept its top position on sales, the data showed, followed by JD.com, ByteDance's Douyin and Pinduoduo Holdings' Pinduoduo. Syntun did not provide sales figures for each platform.
Despite the upbeat figures, the world's second-largest economy's retail sector continues to struggle due to concerns over employment stability, stalled wage growth and the ongoing property crisis.
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Retailers and the government have sought to lift subdued spending by deepening discounts and expanding consumer subsidies but analysts say longer festivals and year-round discounts have dampened excitement for these kinds of events.
'I don't have anything special to buy during the 618 shopping festival. Because there are always great deals, I can buy whatever I need whenever,' said Xu Binqi, who works in Beijing's film industry. 'Take skincare products as an example, I buy them whenever I run out, and the prices are no higher than during the 618 festival.'
Rachel Lee, general manager of market research firm Worldpanel China and co-author of Bain .'s recent China Shopper Report, said that when consumers are budget-conscious, they seek affordable alternatives, and discounts play a lesser role.
'Standalone promotional discounts will find it increasingly difficult to drive volume growth,' she said.
This year, JD.com said the number of users placing orders for the 618 event more than doubled year on year, with over 2.2 billion orders across its online, offline and food delivery platforms.
Alibaba said that 453 brands surpassed 100 million yuan in GMV over the 618 period.
Brands that surpassed one billion yuan in GMV included Apple, Xiaomi, Huawei, Nike, Adidas, L'Oréal and Lululemon, Alibaba added.
Retail growth, subsidy impact
While the retail environment in China remains difficult, there are signs that consumption overall has picked up in recent months. Retail sales growth surpassed expectations in May, with official data showing a 6.4 per cent increase, the fastest growth since December 2023.
Analysts pointed to the earlier start of 618, along with government consumer subsidies for goods such as home appliances and mobile phones, as twin drivers.
Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, said the extended 618 festival front-loaded consumer demand, encouraging earlier spending and smoothing consumption trends into May.
'A longer 618 festival with low prices helps sustain engagement across weeks and has contributed materially to May's strong retail performance,' Cooke said.
Analysts warn that a pause in subsidy programmes in several regions, as central government allocations dry up, could weigh on 618 sales and overall consumption this month, though more funds are likely to be allocated for those programmes in July.
'Rapid sales growth of key subsidy categories (such as home appliances) driven by the 618 shopping festival starting from May...have quickly depleted funds,' HSBC analysts wrote in a note.
Eve Wang, 32, reflected on the shift in spending habits: 'In the past, for example during events like Singles' Day and 618, I used to spend a lot of money on stockpiling goods, but now ... I only buy what I need.' REUTERS
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Straits Times
15 hours ago
- Straits Times
China's 618 shopping festival 2025 sees strong sales and consumer spending fuelled by government subsidies
– China's 618 mid-year shopping festival closed on June 18, following more than a month of promotional events beginning in mid-May, with major e-commerce giants boasting about strong sales in home appliances and electronics during this period. Yet much of 2025's surge in demand came not from renewed consumer confidence, which has in recent years been shaken by a sluggish economy, a weak job market and a property downturn. Instead, it comes from the government-funded goods trade-in programme and national subsidies, raising questions about how sustainable the consumer spending rebound is. Policy support is clearly the core driver in 2025's 618 shopping festival, as reflected in sales data, said Mr Xu Tianchen, senior economist at the Economist Intelligence Unit (EIU). 'Every category targeted by subsidies – except cars – posted over 20 per cent sales growth from January to May, while non-subsidised categories, such as apparel and food and beverage, saw much slower growth,' said Mr Xu, referencing data released by China's National Bureau of Statistics on June 16. Smartphones, washing machines and air-conditioners are among the consumer goods that have seen strong sales, as they are covered under a central policy that gives consumers up to 2,000 yuan (S$358) in discounts per item. Started in early 2024, the initiative was expanded in 2025 to cover a wider range of products and is slated to run throughout the year. To further entice customers to buy, e-commerce platforms stacked discounts on top of the government subsidies. Some products ended up 40 per cent to 50 per cent cheaper than their original price tag, while other high-priced products came with a hefty discount. For instance, a Chinese consumer could buy an Apple iPhone 16 Pro, which was included in the national subsidy programme for the first time in 2025 , for 2,500 yuan off its original price on e-commerce platforms after subsidies and discounts. The policy-fuelled spending spree comes at a time when Beijing is seeking to expand domestic consumption as its top economic priority in 2025, as the nation braces itself for a prolonged trade war with the United States. To finance the subsidy programme, Beijing doubled the amount of ultra-long special sovereign bonds to 300 billion yuan in 2025, compared with the year before. Ms MingYii Lai, a strategy consultant at Shanghai-based market research firm Daxue Consulting, said the 618 sales spike is not a reflection of organic optimism among consumers. She noted that there are many examples on Chinese social media showing how people are rushing to buy electrical appliances before home renovations are even finished, or that consumers are reluctant to purchase without subsidies or heavy discounts. 'These show that purchases were supported by the sentiment to exploit subsidies rather than discretionary spending,' she said. A performance at JD Mall in Beijing, as part of the 618 shopping festival activities on June 18. ST PHOTO: MICHELLE NG At around 2pm on June 18, a newly opened JD Mall in Beijing's Shuangjing district was lively with a steady flow of shoppers out to get a good deal on appliances and electronics, in which the mall specialises. Others were drawn to the air-conditioned mall to seek respite from the summer heat or for the 618 festival's fringe activities aimed at increasing footfall, such as a meet-and-greet session with Chinese pop singer Huang Ying, in the mall's atrium. Shopper Li Qiang, 30, who was out shopping for a robot vacuum cleaner, told The Straits Times that he had just days ago traded in his old Xiaomi smartphone for a OnePlus smartphone, a Chinese sister brand to Oppo. 'The original price was 4,500 yuan, but there were so many discounts you could stack on, I can't even remember exactly how much I paid. I just know that it's the cheapest to buy now,' said the Hebei native, who works for a logistics company in Beijing. 'Honestly, I'm not too worried about spending money because the fact that our government can still give out subsidies even when the US-China trade war is going on shows that our country is strong,' he added. A washing machine promoter, Mr Li Mingzhou, 35, at Chinese home appliance brand Casarte, said he had a busy morning, having sold about 30 units since the store opened. He hoped to clock another 30 to 40 deals later that day, as he expected the crowd to thin out in the days ahead after the promotion period ends. 'There are also rumours that the government may stop the subsidies soon as the funds are drying up, so in the last few days, people were rushing in to buy the appliances they need,' he said. A coffee bean appreciation pop-up workshop as part of the 618 shopping festival activities at JD Mall in Beijing on June 18. ST PHOTO: MICHELLE NG In the past two weeks, there have been reports of local governments in Chongqing city and Henan province suspending the subsidies temporarily because of insufficient funds. Other provinces such as Jiangsu and Guangdong have started imposing a daily quota on the number of such subsidies distributed. To calm the online chatter, Chinese state media on June 18 reported that just over half of the total of the 300 billion yuan has been distributed and that the central government will issue the rest of its funds in an orderly manner and will guide local governments to use the funds at a stable pace. Originally a single-day celebration to mark the founding of e-commerce company on June 18, 1998, the 618 festival has now been expanded to include all e-commerce platforms and has seen increasingly longer promotional periods. It is now one of China's biggest consumption events alongside Singles' Day on Nov 11. A live-stream host selling products online at JD Mall in Beijing on June 18. ST PHOTO: MICHELLE NG , now China's largest retailer, said that the number of customers placing orders across its online, offline and food delivery platforms for the 618 festival surpassed 2.2 billion, which is more than double the previous year. Another e-commerce giant, Alibaba, said 453 brands on its Tmall platform exceeded 100 million yuan in sales value, a 24 per cent increase from the year before. Both companies have not disclosed overall sales figures in recent years. Analysts said while the consumption figures for 2025's 618 festival look positive, the momentum might not be sustainable and Beijing will need to come up with more endurable measures to ensure economic recovery for the longer haul. A note from Japanese investment bank Nomura on June 16 said that while retail sales performed well above market expectations in May, it expects the boost from the trade-in programme to fade in the second half of the year. EIU's Mr Xu said the Chinese government, if it intends to continue with the subsidy scheme, should consider broadening the scope of the support beyond durable goods. This could come in the form of more universal consumption vouchers, covering anything from food and tourism to clothes and massages, which would be 'more market-driven and flexible', he said. Said Mr Xu: 'Services spending occurs at a much higher frequency – you don't buy a car every year but most people dine out every few days – and frontloading of consumption is less of a problem.' Michelle Ng is China correspondent at The Straits Times. She is interested in Chinese foreign policies, property trends, demographics, education and rural issues. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
18 hours ago
- Business Times
China's 618 shopping fest sets record, but daily spending slips
[BEIJING] China's largest mid-year shopping festival, 618, ended on Wednesday (Jun 19) with record sales, though daily spending dropped amid an extended sales period aimed at enticing consumers to part with more of their hard-earned money. The longer sales period helped the combined gross merchandise value (GMV), a business metric commonly used in e-commerce, reach an all-time high of 855.6 billion yuan (S$153.3 billion), according to retail data provider Syntun. That was 15.2 per cent higher than the prior year's 742.8 billion yuan. The festival, originally a single-day event celebrating founding on Jun 18, has evolved into a month-long affair spanning all major e-commerce platforms. This year's pre-sales began on May 13, a week longer than in 2024, leading to lower average daily spending of 2.31 billion yuan, compared with 2.48 billion yuan last year, according to Reuters calculations. Alibaba Group's Tmall kept its top position on sales, the data showed, followed by ByteDance's Douyin and Pinduoduo Holdings' Pinduoduo. Syntun did not provide sales figures for each platform. Despite the upbeat figures, the world's second-largest economy's retail sector continues to struggle due to concerns over employment stability, stalled wage growth and the ongoing property crisis. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Retailers and the government have sought to lift subdued spending by deepening discounts and expanding consumer subsidies but analysts say longer festivals and year-round discounts have dampened excitement for these kinds of events. 'I don't have anything special to buy during the 618 shopping festival. Because there are always great deals, I can buy whatever I need whenever,' said Xu Binqi, who works in Beijing's film industry. 'Take skincare products as an example, I buy them whenever I run out, and the prices are no higher than during the 618 festival.' Rachel Lee, general manager of market research firm Worldpanel China and co-author of Bain .'s recent China Shopper Report, said that when consumers are budget-conscious, they seek affordable alternatives, and discounts play a lesser role. 'Standalone promotional discounts will find it increasingly difficult to drive volume growth,' she said. This year, said the number of users placing orders for the 618 event more than doubled year on year, with over 2.2 billion orders across its online, offline and food delivery platforms. Alibaba said that 453 brands surpassed 100 million yuan in GMV over the 618 period. Brands that surpassed one billion yuan in GMV included Apple, Xiaomi, Huawei, Nike, Adidas, L'Oréal and Lululemon, Alibaba added. Retail growth, subsidy impact While the retail environment in China remains difficult, there are signs that consumption overall has picked up in recent months. Retail sales growth surpassed expectations in May, with official data showing a 6.4 per cent increase, the fastest growth since December 2023. Analysts pointed to the earlier start of 618, along with government consumer subsidies for goods such as home appliances and mobile phones, as twin drivers. Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, said the extended 618 festival front-loaded consumer demand, encouraging earlier spending and smoothing consumption trends into May. 'A longer 618 festival with low prices helps sustain engagement across weeks and has contributed materially to May's strong retail performance,' Cooke said. Analysts warn that a pause in subsidy programmes in several regions, as central government allocations dry up, could weigh on 618 sales and overall consumption this month, though more funds are likely to be allocated for those programmes in July. 'Rapid sales growth of key subsidy categories (such as home appliances) driven by the 618 shopping festival starting from quickly depleted funds,' HSBC analysts wrote in a note. Eve Wang, 32, reflected on the shift in spending habits: 'In the past, for example during events like Singles' Day and 618, I used to spend a lot of money on stockpiling goods, but now ... I only buy what I need.' REUTERS
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2 days ago
- Business Times
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