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2022-06-20 11:09:15

Last year, Irene Ge spent more than 20,000 yuan ($2,992) during the 22-day 618 shopping festival. The discounts were an opportunity to buy appliances as she renovated her home, and she splashed out on a new pair of headphones, makeup, and skincare products.

For weeks, the streets around her apartment were awash in cardboard boxes, as they are twice every year. China’s two major online shopping festivals, the Alibaba-invented Nov. 11 “Singles’ Day” and JD.com’s June 18 birthday, are the world’s largest sales, sprawling into three-week shopping extravaganzas that have dedicated discount shoppers spending weeks glued to coupon-hunting games. Every year, they culminate in platforms claiming record sales.

This year was a bit quieter. Ge made only two purchases during the three-week period, spending about 500 yuan on an air fryer and a bottle of makeup remover, both gifts for her mother’s birthday.

China’s annual 618 shopping festival wrapped up on Saturday to a lukewarm response from shoppers, as the country’s second-largest e-commerce platform JD.com recorded a 10.3% rise in total sales from June 1 to June 18, the company said, marking the slowest growth of the past five years.

“I would have bought them anyway without the festival. It seems like nowadays people have lost interest in shopping sprees,” the 30-something Shanghainese said. She told Sixth Tone that she hadn’t noticed the usual blizzard of deliveries this year.

China’s largest e-commerce platform operator, Alibaba, didn’t publish sales figures for the second consecutive year. According to an estimation by retail market consultancy Syntun, total sales across major e-commerce platforms, including major online marketplaces Tmall, JD.com, and Pinduoduo, were 582.6 million yuan, a slight increase from last year’s 578.5 million yuan.

The 618 shopping festival began as “JD Day,” a birthday party for the country’s second-large e-commerce platform. As Alibaba and other competitors joined the action, it became the country’s second largest discount period, and a barometer for the consumer’s spending capacity, akin to the Christmas shopping season in other countries.

Disappointing sales reflect an economy still reeling from the extended lockdowns of the spring.

The lockdowns left merchants in a weak position at the start of the sales season. In normal years, merchants need good sales in the months leading up to the sales season in order to get high rankings from platform algorithms. They also need a financial buffer to be able to fund the steep discounts customers expect.

Ju Yi, founder of pet product brand Mollybox, told domestic media that 80% of the company’s April buyers asked for refunds after the company failed to deliver products from its warehouse in Shanghai amid the citywide lockdown. He said many companies stepped back from 618 for fear of a greater loss from marketing expenses.

Major platforms simplified sales rules, offered bigger discounts, and relaxed conditions for merchants this year in an effort to boost 618 sales. But industry players and observers told local media that such incentives have squeezed profits and increased risks for small-and-medium enterprises, as merchants foot most of the bill for discounts.

“For both platforms and companies, the time for pursuing high growth is gone, especially amid weak consumer demand,” Wen, an e-commerce platform professional asking to be identified by her surname for privacy reasons, told Sixth Tone. “It will be more realistic and important to solidify the existing consumer base and focus on upgrading services.”

Ge said that the lockdown left her less interested in shopping for clothes and cosmetics.

“The long lockdown got me used to getting stuff that I truly need and exhausted my enthusiasm for extra buying,” she said.

Correction: A previous version of this article misstated the date of JD.coms founding. It is June 18, not July 18.

Editor: David Cohen.

(Header image: Workers sort packages at a logistic center in Nanjing, Jiangsu province, June 16, 2022. VCG)