618 shopping festival kicks off, boosting consumption recovery

The 618 shopping festival in China has officially launched, with major e-commerce platforms such as Tmall, Pinduoduo and JD.com offering massive discounts and promotions. Sales of 59 brands surpassed 100 million yuan ($13.81 million), with 376 products reaching sales of more than 10 million yuan on Tmall within just four hours of the start of the event on the platform on Monday evening.

As an important window on new consumption trends, and also a barometer of China's consumer market, the surge in sales highlights the nation's strong consumer demand and the festival's role in boosting China's consumption recovery, experts said.

Tmall, for example, has invested an additional 15 billion yuan in red envelopes on top of existing discounts, leading to an increase of 14 times in site visits compared with last year. It also offered 50 yuan off for every 300 yuan spent and an official discount of 15 percent on Tmall, the Global Times learned from the platform.

Xiaomi and Vivo were among the 28 brands that quickly surpassed the sales threshold of 100 million yuan within the first hour of the festival on Tmall. Apple's sales exceeded 1.5 billion yuan within an hour.

Liquor sales through live streaming increased by more than 1,300 percent, up 147 percent in baijiu products compared with the first sales day last year. Multiple luxury brands achieved sales exceeding the total sales of last year within just one hour.

Pinduoduo kicked off its 618 promotions on Sunday, offering 30 yuan worth of discounts for every 200 yuan spent. It also offered 618 yuan worth of coupons for each consumer.

JD.com announced that its 618 event will start on May 31, with a focus on home appliances and trade-in program. The platform has pledged to invest 6.5 billion yuan in 2024 to support a new wave of equipment upgrades and trade-ins for consumer goods.

"This year's 618 shopping festival has simpler rules, it canceled pre-sales and there are stronger promotional incentives with a focus on consumer experience and satisfaction," Liu Dingding, a veteran observer of the e-commerce industry, told the Global Times on Tuesday.

"We expect that there may not be a total transaction amount announced, but there will be segmented area rankings," Liu added.

Trade-in promotions have become a highlight in this year's 618 in response to the call for large-scale equipment renewals and consumer goods trade-ins, which have been gaining momentum nationwide.

An official of the National Development and Reform Commission said on Tuesday that since the launch of the programs in March, home appliance and vehicle companies have introduced subsidies exceeding 15 billion yuan. E-commerce platforms in collaboration with manufacturing companies have invested more than 10 billion yuan in trade-in promotions.

Liu noted that by offering new discounts, the 618 shopping festival is playing a significant role in driving China's consumer spending and boosting the country's consumption recovery.

In the first four months, national online retail sales reached 4.41 trillion yuan, up 11.5 percent year-on-year. Online retail sales of physical goods totaled 3.74 trillion yuan, up 11.1 percent, accounting for 23.9 percent of total retail sales, according to the Ministry of Commerce.

From January to April, China's retail sales grew by 4.1 percent year-on-year.

It is anticipated that consumer spending will rise about 5 percent for the entire year, driven by improvements in the economic cycle and policy incentives, Wu Chaoming, a deputy head of the Chasing Research Institute, told the Global Times on Tuesday.