Latest news with #618
CNBC
14 hours ago
- Business
- CNBC
Is China going through a consumption revival? Its 618 festival is one sign of it
China's latest shopping festival, which wrapped up Wednesday, pointed to a pickup in consumption, as e-commerce companies reported strong sales of consumer electronics, as well as beauty and pet care products. The 618 festival is one of the biggest promotional periods of the year in China as Alibaba, and other major Chinese e-commerce platforms roll out discounts. This year, the festival's gross merchandise value, a measure of sales over time, surged by 15.2% from last year to an estimated to 855.6 billion yuan ($119 billion), according to retail data provider Syntun. That points to some recovery in consumption, after Syntun data for last year's 618 festival revealed a year-on-year decline in sales for the first time in eight years. However, as has been the case with other annual shopping events, retailers expanded the promotional period to start May 13, a week earlier than in 2024, before ending June 18. Still, said the number of shoppers participating hit a record high, more than doubling year on year between May 30 and June 18 to an unspecified figure. More than 2.2 billion orders were recorded across JD's channels, which include online and offline stores, food delivery and quick commerce, according to the retailer. Investors were surprised Monday by a better-than-expected 6.4% increase in national retail sales in May from a year ago — the fastest increase since December 2023, according to official data accessed via Wind Information. Chinese consumers are spending "a lot of money on outerwear. Cosmetics and beauty doing really well," Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies, told CNBC on Friday. The company helps foreign brands — such as Vitamix and iS Clinical — sell online in China and other parts of Asia. His firm estimates that gross merchandise value during 618 grew by around 14.1% from a year ago, pointing to a slightly slower increase than what Syntun reported. He also pointed to growing numbers of customers outside of China's big, well-known cities, based on the packages he's seen leaving his company's warehouse. Beijing's trade-in program to subsidize certain consumer products such as consumer electronics helped boost sales. Household appliances emerged champion among the categories, bringing in 110.1 billion yuan in sales, while beauty and skin care products clocked in 43.2 billion yuan in sales, according to Syntun. Similarly, Chinese e-commerce giant Alibaba's Taobao and Tmall reported strong sales in categories eligible for government subsidies — with initial sales more than tripling from the same period around the Nov. 11 Singles' Day shopping festival, indicating increased consumer interest in the newest batch of subsidies. Taobao's generative artificial intelligence tools also boosted sales. Its image-to-video feature and an advanced marketing bidding model boosted campaign return on investment by an average of 12%, the company said earlier this month. That echoes how Alibaba and other major Chinese companies reported improved first-quarter consumer sales, bolstered in part by AI-powered marketing tools. Shoppers are also splurging on their pets. Taobao and Tmall noted a surge in demand for pet care products, as total sales in the first 100 minutes surpassed the total sales from the first four hours of the same period last year. But despite strong sales, the mid-year e-commerce festival lost some steam toward the end after some Chinese provincial governments ran out of money to keep offering trade-in subsidies, Chinese media Yicai reported Thursday. "We believe the June 18 promotion this year could have been stronger, had the trade-in subsidy program remained intact," Nomura analysts said in a note Thursday. The analysts added that of 32 mainland China regions, around a dozen have suspended trade-in programs. State-run news agency Xinhua on Friday refuted claims that regions had canceled the subsidies. Xinhua on Friday also reported that Chinese consumers can expect more consumer goods subsidies from the government as early as July. This year's 618 festival lasted over a month, running from May 13 to June 18. While retail sales have improved in that period, experts warn that the prolonged duration of such festivals could reduce the incentive for consumption. "If you do have these festivals, and that's becoming more regular feature of these online platforms that these discounts, rebates and special offers, they continue all throughout the year in different guises, then it becomes difficult for the average consumer to keep on participating in them," said Manishi Raychaudhuri, CEO of Emmer Capital Partners, on CNBC's "The China Connection" on Friday. Instead, the government and companies will have to think of more innovative ways to boost domestic consumption, he added. Beijing has opted not to hand out cash to consumers, instead focusing on subsidies for specific products and incremental measures to support employment.
The Star
16 hours ago
- Business
- The Star
Shopping gala boosts market vitality
Chinese consumers unleashed their massive purchasing power during the midyear "618" shopping carnival, a weekslong sales event that began in mid-May and reached a crescendo on Wednesday, June 18, which experts said is pivotal to bolstering the recovery of consumption and shoring up economic growth. They noted that the buying frenzy indicates the enormous vitality and potential of the country's consumer market, with household appliances and intelligent electronic products gaining popularity among Chinese shoppers amid the country's steps to boost consumption, including the expansion of the consumer goods trade-in program. To further stimulate people's purchasing appetites, they called for more measures to increase household incomes, distribute consumption coupons, and nurture diversified purchasing scenarios and new types of consumption. Data from e-commerce giant JD, which initiated the mid-year promotional campaign, showed that as of 11:59 pm on Wednesday, the number of users placing orders more than doubled year-on-year, while the total order volume from its online and offline retail and food delivery businesses exceeded 2.2 billion. The number of new electronic gadgets that saw their sales surpass 10 million yuan ($1.4 million) surged 200 percent year-on-year during the shopping extravaganza, which officially kicked off at 8 pm on May 30, JD said. The turnover of over 2,000 brands in the home appliances and home furnishing sector increased 100 percent from a year earlier. According to Tmall, Alibaba's business-to-customer platform, the sales of 453 brands exceeded 100 million yuan from 8 pm on May 16 to midnight on Wednesday, an increase of 24 percent compared with the same period last year. The transaction volume of Apple, Midea, Xiaomi, Huawei and Nike each reached more than 1 billion yuan during the promotional gala. In addition, outdoor sporting goods, beauty and skin care products, apparel and trendy toys witnessed robust growth on online marketplaces during the shopping extravaganza that now spans around one month. Noting that consumption has become the main driving force boosting China's economic growth, Hong Yong, an associate research fellow at the Chinese Academy of International Trade and Economic Cooperation, said the online shopping bonanza has played a vital role in bolstering domestic demand, unleashing consumers' purchasing potential and shoring up the economy. Hong estimated that the country's consumer market is poised for steady growth this year, fueled by a series of pro-consumption policies, online shopping festivals and stable recovery of the macroeconomy despite external uncertainties. He called for more efforts to strengthen employment support, cultivate new types of consumption in the digital, green and intelligent fields, and improve the consumption environment, in order to boost people's ability and willingness to spend. In this year's Government Work Report, China listed vigorously boosting consumption and expanding domestic demand across the board as key priorities for 2025. Mo Daiqing, a senior analyst at the Internet Economy Institute, a domestic consultancy, said that e-commerce platforms have ramped up efforts to offer discounts and subsidies, increase support for small and medium-sized merchants, and simplify promotional methods to rev up sales. "The policy measures to expand the scope of the consumer goods trade-in program have not only stimulated consumers' desire to purchase, but also pushed up the sales of household appliances and electronic devices, and bolstered the popularisation of green and energy-saving products," Mo said. China's retail sales, a significant indicator of consumption strength, grew 6.4 percent year-on-year in May, marking the fastest growth since December 2023, according to the National Bureau of Statistics. Online sales remained a bright spot, expanding 8.5 percent year-on-year during the first five months. Jason Yu, general manager of CTR Market Research, said that Chinese consumers have become more value-conscious and prefer to purchase premium products with high cost-effectiveness, emphasising that retailers should step up investment in technological innovation and roll out new merchandise to attract more young shoppers. - China Daily/ANN
Straits Times
a day ago
- Business
- 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.
Fashion Network
a day ago
- Business
- Fashion Network
China's 618 shopping festival sees slower momentum despite extended run
China's retail sector continues to struggle amid concerns over job stability, stagnant wage growth and the ongoing property crisis, leaving shoppers hesitant to splurge. Retailers and the government have attempted to revive muted consumer spending through deeper discounts and broader consumer subsidies. Although extending the sales period may support overall sales growth during this year's 618 period, analysts say that prolonged festivals and year-round promotions on e-commerce platforms have diminished enthusiasm for these 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, for 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 & Co.'s recent China Shopper Report, said that when consumers are budget-conscious, they opt for more affordable alternatives, making discounts less of a factor. "Standalone promotional discounts will find it increasingly difficult to drive volume growth," she said. Major e-commerce platforms have not disclosed overall sales figures for 618 in recent years. However, according to data provider Syntun, sales during the mid-year festival last year declined for the first time in 2024, down 7% to 742.8 billion yuan ($103.31 billion) compared to the previous year. This year, reported that the number of users placing orders during the 618 event more than doubled compared to the previous year, totaling over 2.2 billion orders across its online, offline and food delivery platforms. Alibaba stated that 453 brands surpassed 100 million yuan ($13.91 million) in gross merchandise volume (GMV) over the 618 period. Brands that exceeded 1 billion yuan in GMV included Apple, Xiaomi, Huawei, Nike, Adidas, L'Oréal and Lululemon, Alibaba added. GMV is a metric used by e-commerce companies that is roughly analogous to sales revenue.
Fashion Network
a day ago
- Business
- Fashion Network
China's 618 shopping festival sees slower momentum despite extended run
China's retail sector continues to struggle amid concerns over job stability, stagnant wage growth and the ongoing property crisis, leaving shoppers hesitant to splurge. Retailers and the government have attempted to revive muted consumer spending through deeper discounts and broader consumer subsidies. Although extending the sales period may support overall sales growth during this year's 618 period, analysts say that prolonged festivals and year-round promotions on e-commerce platforms have diminished enthusiasm for these 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, for 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 & Co.'s recent China Shopper Report, said that when consumers are budget-conscious, they opt for more affordable alternatives, making discounts less of a factor. "Standalone promotional discounts will find it increasingly difficult to drive volume growth," she said. Major e-commerce platforms have not disclosed overall sales figures for 618 in recent years. However, according to data provider Syntun, sales during the mid-year festival last year declined for the first time in 2024, down 7% to 742.8 billion yuan ($103.31 billion) compared to the previous year. This year, reported that the number of users placing orders during the 618 event more than doubled compared to the previous year, totaling over 2.2 billion orders across its online, offline and food delivery platforms. Alibaba stated that 453 brands surpassed 100 million yuan ($13.91 million) in gross merchandise volume (GMV) over the 618 period. Brands that exceeded 1 billion yuan in GMV included Apple, Xiaomi, Huawei, Nike, Adidas, L'Oréal and Lululemon, Alibaba added. GMV is a metric used by e-commerce companies that is roughly analogous to sales revenue.
