(CapitalWatch, June 20, New York) China's second-largest annual shopping fest concluded over the weekend, breaking records again – but also showing the slowest growth for some market players amid continued uncertainty.
Concluding on June 18, the "618" is the second-largest sales spree in China after Singles Day, which takes place on Nov. 11. This year, it was kicked off as early as late May by some retailers – following the reopening of Shanghai after Covid lockdowns. The extended festival closed with peak sales day on Saturday, and this time, e-commerce platforms hit record GMV numbers again.
JD.com (Nasdaq: JD; HKEX: 9618) said in a statement over the weekend that it booked sales of 379.3 billion yuan ($56.4 billion). Sales in the digital yuan, China's novel centralized e-coin system, surged to 400 million yuan, according to the company. The e-commerce giant noted surging sales of electronics, camping and outdoor gear, home appliances, auto products, and farmers' produce.
Global Times called the results "proof of a bounce back in consumer spending," and cited analysts calling the consumption uptrend will continue after June. The medium said distribution centers were overstocked and some brought workers from other cities to major centers including Shanghai.
Yet some analysts are seeing other signs. Last year, JD reported 343.8 billion yuan in sales during the 618 fest – that was year-over-year growth of nearly 30% compared with 2020. This year, the growth has slowed to about 10%.
On its side, the top online retailer in China, Alibaba (NYSE: BABA; HKEX: 9988), which runs Tmall, Taobao, and other platforms, avoided disclosing actual 618 figures altogether – same as it did a year ago. But the company noted the hottest shopping trends were tech gadgets for pets and male beauty products. Earlier, Alibaba said luxury retail has been thriving even during the uncertainties of the pandemic lockdowns.
In a blog, published Friday on Alizila, Alibaba highlighted other developments of the festival days, such as childcare consulting, free rides from shopping at its Hangzhou brick-and-mortar store, and self-designed new cloud infrastructure for its data centers. Alibaba also said it would process payments faster for merchants in aim to improve their liquidity during the pandemic.
Another major Chinese retailer, Pinduoduo (Nasdaq: PDD), does not publish 618 results either. Market research firm Syntun estimated a total GMV of 695.9 billion yuan during the 2022 mid-year festival shared among the major e-commerce platforms. It also said household appliances was a top category during the event, with GMV of 87.9 billion yuan.
U.S. financial markets were closed Monday in observance of Juneteenth for the first time. In Hong Kong, shares of JD closed nearly 3% in the red Monday; Alibaba ended nearly flat, at HK$104.40 per share.
The South China Morning Post wrote that some of the world's top funds run by BlackRock, JPMorgan, and Fidelity, have been stocking up on the shares of Chinese tech stocks in Hong Kong, going against the "uninvestable" status these stocks were slapped with just months ago. After the 2021 crackdown by the Chinese government, the private techs including Alibaba and JD have suffered significant devaluations and are now traded at a bargain compared with their level of a year ago.