China’s 618 shopping festival has become the latest battlefield in the country’s brutal e-commerce market after Singles’ Day

For China’s e-commerce giants, it is clear that the pool of potential new customers is shrinking, forcing them to compete for the spending of existing consumers

Sales turnover generated via live-streaming on Tmall in the first hour of June 1 was equal to the average daily turnover last year, Alibaba said

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Workers handle packages for delivery at a warehouse in Huzhou, Zhejiang Province, Feb. 8, 2021. The country’s two biggest shopping sprees serve as a barometer of consumer sentiment in the world’s second-largest economy. Photo: Xinhua

Published: 8:30am, 5 Jun 2021Updated: 8:33am, 5 Jun 2021

Starting this week, Chinese netizens have been bombarded with online promotions promising them a share of billions of yuan in shopping subsidies, and offers of refunds if they find a better price on another e-commerce platform.

It is all part of “618” – an event that began as a simple June 18 anniversary promotion for online retailer JD.com in 2004, but has since grown into a huge midyear shopping extravaganza embraced by all the major e-commerce platforms vying for a piece of the consumer wallet.

Each year, the frenzy of sales activity kicks off as soon as May ends. This year, Tmall and Taobao, the two e-commerce platforms run by South China Morning Post owner Alibaba Group Holding, flooded their apps and websites with deals and live-streaming channels to take advantage of the shopping extravaganza.

Sales turnover generated via live-streaming on Tmall in the first hour of June 1 was equal to the average daily turnover last year, Alibaba said. Separately, JD.com said over 4,800 brands on its platform saw at least a 500 per cent jump in transaction volume on June 1 compared to the same day last year.

However, behind the rosy numbers is a harsh reality for China; online sales growth for the industry is slowing as competition intensifies among a wave of new players. For platforms and merchants, it is getting harder and costlier to capture consumer spending.

On Alibaba’s Taobao, the largest e-commerce platform in China, consumers are given subsidies in the form of gaming and raffles if they watch the live-streaming channel. Alibaba said it has budgeted 700 million yuan (US$109.4 million) in consumer giveaways on Taobao during this year’s 618 promotion.