618 used to be a time for runaway spending and even more freewheeling discounts, but something looks to have changed. This year, the 618 shopping festival appears to have run out of steam. Analysts are pointing to that struggling consumer market we continue to hear about, and a shift away from a love for wild discounts.
Originally launched by JD.com (京东) to celebrate its founding on 18 June, the festival evolved from a single-day sales spree to a weeks-long promotional campaign that spans all of China’s major e-commerce platforms. This year’s edition began in mid-May and will continue until 20-21 June, making it one of the longest 618 events on record.
Even with the extended sales period, consumer enthusiasm looks dampened. Many shoppers are spending only when necessary, rather than stockpiling discounted goods. Why? China’s economy is struggling with a prolonged downturn. Consumer confidence also looks weak.
Last year’s 618 festival generated RMB 855.6 billion (about US $127 billion) in gross merchandise value. That is – according to retail data provider Syntun – a 15% increase from the previous year.
However, of that spike, daily spending levels declined, suggesting growth was driven more by longer promotional periods than stronger consumer demand. Analysts expect this year’s sales growth to remain in the single digits.
External effects are hampering sales too: Chinese authorities have increasingly criticised excessive price wars among e-commerce platforms, encouraging companies to focus on sustainable growth rather than headline sales figures.
The Dao view: The AI behind this year’s 618 shopping festival
One interesting development for this year’s 618 is that it seems to have become a testing ground for artificial intelligence. Major platforms are using the shopping festival to showcase AI-powered assistants.
These are designed to help consumers search, compare and purchase products through conversational interfaces. As competition intensifies, and sales stagnate, the battle for China’s online shoppers looks more and more like a race for AI leadership, and that all-important shopping convenience.
