Post-lockdown Shanghai among top spending cities during China’s 618 online shopping extravaganza
- Shanghai ranks second in spending power among all mainland Chinese cities during JD.com’s 618 online shopping event this year
- However, companies and analysts remain cautious about the e-commerce industry’s full-year outlook after revenge spending tapers off
Residents of Shanghai, who recently emerged from a two-month citywide lockdown, have been some of the most active consumers during this year’s June 18 shopping festival, although dampening consumer spending across the country continues to weigh on the industry’s outlook.
Shanghai ranked second in spending power among all mainland Chinese cities during JD.com’s 618 festival so far this year, the e-commerce giant said on Saturday. Beijing was first.
The online shopping extravaganza, initiated by JD in 2004 to mark the firm’s sixth anniversary, has since become China’s most important e-commerce event after Singles’ Day in November. JD’s event this year lasts from May 23 to June 20.
In terms of average spending, Shanghai ranked third, trailing Beijing and Tibet, said Liu Hui, who leads JD’s Consumption and Industry Development Research Institute, during a live stream on Saturday.
“With the easing of pandemic restrictions in Shanghai, our experts are optimistic about the year-on-year growth of the gross merchandise volume (GMV) trend for beauty e-commerce during the upcoming 618 shopping festival in China, especially for leading brands,” said Jamie Chen, an analyst at consultancy Third Bridge, earlier this week.
Pinduoduo, another major Chinese e-commerce platform, kicked off its 618 promotions on May 23. Data released by the company on Saturday showed the GMV of both make-up products and home appliances more than doubled.
“However, our experts are cautious about the full-year growth rate as revenge spending behaviour is likely to taper off this year with consumers looking to spend more rationally,” said Chen.
Xin Lijun, chief executive of JD Retail, told Bloomberg News this week that “the impact in the Covid-stricken cities is obviously larger” and that the company is worried “there is no rapid recovery”.
JD rival Alibaba Group Holding, owner of the South China Morning Post, is also hosting its own June 18 promotion on its online marketplace Tmall, offering discounts and vouchers to customers between May 26 and June 20.
Data from Tmall showed some of the platform’s most popular merchandise this year include fishing equipment and camping gear, as outdoor activities have gained traction amid strict Covid-19 measures, which have included restrictions on dining and shopping.
The GMV of fishing equipment soared by nearly half between May 31 and June 3 from a year earlier, while the GMV of camping gear more than doubled, according to Tmall.
Other products that have been flying off the shelves include pet products, which saw their GMV more than double, Tmall said. The GMV of smart devices for pets, including self-cleaning cat litter boxes, jumped by almost 150 per cent.
Tencent challenges Alibaba, Douyin with 618 shopping festival debut
Tencent did not immediately respond to an inquiry about its sales figures.
“Overall purchasing power of consumers remains weak in 2022 and the consumer population has shifted to the post-2000s generation,” said analyst Chen. “These consumers have a strong recognition of domestic brands and have more choices, but their purchasing power is not strong.”
